On an otherwise pretty severe market day, Cisco Systems
Cisco reported second-quarter sales of $9.8 billion, 8% above the year-ago period. Pro forma earnings expanded from $0.32 per share to $0.40 per share for a 25% year-over-year boost. "We saw dramatic across-the-board acceleration and sequential improvement in our business in almost all areas," CEO John Chambers said. The book-to-bill ratio was "approximately one," indicating that orders are coming in about as fast as Cisco can fulfill them.
This growth happened in spite of Cisco's penchant for investing in new markets without expecting any direct returns on those investments for quite a while. According to Chambers, Cisco is moving into more than 30 new markets right now and feeding new hires into those efforts. The payback will come later or not at all. It’s a strategy similar to the Google
The $3.4 billion acquisition of video conferencing expert Tandberg is one example of this tactic. The deal isn't quite out of the regulatory woods yet, and Cisco doesn't consider the Telepresence market large enough to discuss in earnings reports so far. But even if Tandberg itself should fail to capture mindshare and market share, the mere fact that Cisco invests in high-quality teleconferencing raises the legitimacy and value of that entire market. If everybody kicks Cisco's Tandberg to the curb and buys Polycom
That sounds a lot like the whole "Google vs. Apple
It's poetry in motion, folks. Can you think of anyone besides Google and Cisco that can win big even when they lose? Share your insights in the comments below, then. I'm nearly stumped.
Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. Google and Polycom are erstwhile competitors but fellow Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.