Cisco Systems (NASDAQ: CSCO) reported its fourth quarter earnings today after the market close. The company showed earnings during the quarter of 35 cents per share, and the actual earnings for the quarter came out to 36 cents a share excluding special items.

The company will host its quarterly conference 4:30 PM EDT, and we will be covering the entire call, so be sure to refresh your page frequently to make sure you catch all the updated action.

4:25 pm - We have about 5 more minutes before the call gets started. The stock is trading down 0.3% in after hours trading at this time. Stay tuned, we should be under way shortly.

4:29 pm - Just about to get started here... they are playing some easy listening Fleetwood Mac music for us here while we wait for the call to get started.

4:31 pm - getting started now, currently just going over the SEC rules for the call and earnings release

4:34 pm - call is going to be slightly longer today because we are going to look at 3 areas.... Q4 2007, Full year 2007, and next major shift we can expect to see for Cisco

4:36 pm - CEO John Chambers now taking over for his opening remarks. This was the strongest quarter they have seen in many years. Another record from a revenue GAAP and non GAAP income.

4:38 pm - key financial for Q4 - total record revenue of 9.4 billion which was an 18+% revenue growth rate year over year. Order growth was stronger than revenue growth.. somewhere in the 19 to 20%. non GAAP income rose 21% and GAAP income jumped 25%.

4:40 pm - looking at a couple of the key product areas... routing revenue grew 18% year over year, switches saw revenue growth of 18%, and advanced technology revenues saw a massive 24% growth year over year.

4:43 pm - US business has remained very strong across all business segments... with growth in the upper teens

4:44 pm - very pleased with the accelerated momentum with video software. video applications will continue to load networks and require upgrades to networks which leads company to expect network loads to increase 200 to 300% a year for the next few years.

4:46 pm - order growth in high end routers, Q4 saw growth over 30% year over year, once again supporting the concept of the heavy load networks are getting from the increase of video applications.

4:47 pm - company continues to believe that recent growth can continue to be attained going forward

4:48 pm - company continues to feel they have a perfect global balance in its business.

4:49 pm - The are now expecting to start to see the second major phase of the internet which is going to result in dramatic changes in networking, and will continue to aid the company keep strong growth over the next 10 years.

4:50 pm - over the last 16 quarter, the stand alone growth has stayed in the mid teens. Now raising long term guidance to 12 to 17%, up from 10 to 12%. (i will have to double check those figures, but im pretty sure that is what they stated)

4:52 pm - looking ahead to Q1 2008... the company sees revenues coming in at 9.45 to 9.55 billion, or 16% year over year growth.

4:53 pm - will continue to implement a very similar strategy over the next decade as the company had in the early 90s.

now Dennis Powell taking a closer look at financials

4:54 pm - for the quarter, non GAAP gross margins were 65.2% during the quarter. non GAAP service margin 65.1%

4:56 pm - non GAAP income of 2.3 billion compared with 1.9 billion during Q4 2006. GAAP net income was 1.9 billion compared with 1.5 billion fourth quarter last year

4:57 pm - looking at the full year numbers, 2007 non GAAP earnings were $34.9 billion , up 23% year over year


4:59 pm - during the quarter the company 2.7 billion in cash from operations. During the quarter the company repurchased 50 million shares of common stock for $1.5 billion. Still has 8.8 billion of approvable stock for repurchase as of the end of Q4 07.

5:01 pm - at end of Q4 head count was in excess of 61,000 .

back to John Chambers

5:01 pm - order growth rate was in upper teens in the quarter.

5:03 pm - Enterprise business saw some major swings throughout the year, expect the US enterprise to remain lumpy moving forward. in 6 US enterprise growth was spread over a range between 5 to lower 20s.

5:04 pm - expect emerging market operations to continue to grow for the next 10 years.

5:06 pm - Asia pacific theatre saw growth in the lower teens and averaged around 15% for the fiscal year. China led the way in the mid 20s during the quarter. Japan was flat for Q4 and full year. They are seeing delays in the next generation build up by the major carriers in the country . Japan now represents about 4% of the company's total business.

5:08 am - total advanced technology revenue grew about 45% during fiscal year 2007. This is just the first wave of the advanced technology roll outs that we can expect to see from the company

5:10 pm - Very difficult to single out any one strong product since all products did very well... but... tele presence systems grew by over 300% in Q3 over Q2, and then in Q4 it grew by over 400% over Q3 numbers. They are seeing major interest in this technology from company CEOs as technology that can drive both top and bottom line growth

5:12 pm - 110 tele presence systems are now placed around the globe. Companies are now realizing the importance of tele presence sessions, and in many cases are becoming even more effective than face to face meetings. Metcalfs law states that the value of a system is worth the square of the number of tele presense units. (Not sure i followed this one, but i understand what he means). People will be more effective the less they have to travel, the closer they are to their "home base" information, etc. They are really pumping up their strength in this market segment as being the market leader.

5:14 pm - now back to Dennis. looking for annual revenue to increase up to 16% during full year 2008. Think total gross margins will remain at 65 percent during Q1 08.

5:16 pm - back to Dennis to talk about the leadership team - one of the core secrets to the company's success is the ability to build its leadership team. Dennis will be retiring after Q2 2008 as CFO. Frank Caderone (i am sorry if i butchered your last name) is going to be replacing Dennis after his departure from the team.

5:20 pm - In summary, the momentum of the company remains to stay even strong than it was this time a year ago. it plans to continue its consistency of results over the last 16 quarters of orders growing in the mid teens, and profits growing in the low 20s.

5:22 pm - very pleased with their business in emerging markets, and expect to continue to see strong growth in this area


5:25 pm - Nikkos @ UBS - good to see increase in long term guidance for 2008... Given recent volatility in the market, are they seeing anything in their business that indicates macro impacts on spending on Cisco products? They see this as the strongest global economy they have seen in a very long time. 26 of to 30 countries rose in the top teens during the quarter. In terms of the US, commercial business has been remarkably stable.

5:30 pm - Brandt @ Goldman Sachs - What sort of spending can we expect to see over the upcoming years in order to maintain the company's robust growth expectations. Want to keep operating expenses within 29 to 31 percent or revenues

5:33 pm - Hendricson (?) from Lehman Bros. - Looking at emerging markets... so far emerging markets are coming in right around corporate average for gross margins.. do they see that staying consistent, or should we expect some impact there in the future? They think the team is doing a great job, and this should continue to stay the same... they are seeing very little gross margin pressure in the emerging markets

5:35 Ahood (sorry about the spelling, and i missed your company) - looking at the cash balance... what are the plans to bring the 22 billion in cash down? Are there any? Company is consistent in expectations of cash positions, and they are planning to keep the cash within the range. Will continue to be aggressive in the buyback program. And will be aggressive in acquisition strategy.

5:38 pm Touell @ Merrill Lynch ( I aplogize again, I know I am killing these names today) Looking at switching... 40% of revenue and showing momentum... what is driving the momentum? We are back in a capital investment market. Business are moving more to ethernet, and this build will continue to grow. Will be introducing some new platforms in the near futures that will expend the market in some new areas, and some product evolution impact as well.

5:41 pm - Jason @ Thomas Weissel - What do they see for growth in 2008 for Scientific Atlanta? If you look at business, had a very strong quarter, sales up 30% year over year... transmission business had very good year, grew faster than subscribers... international business outgrowing American business. Had great growth this year... Business still has a lot of momentum heading in 2008, international business still expanding. Doesn't want to forecast growth at same rate as this year, but will be strong.

5:44 pm - Kim from Pacif Quest Securities - Put up some pretty strong numbers... can they discuss applications driving the high end routing? Coming from a mix of things, but video is definitely a major factor. The new video applications are definitely adding to business loads

5:46 pm - Jeff from Sanford Bernstein- What is best way to deal with Web 2.0? They see opportunities in hardware, and software. They big area is software which is where they are heavily loaded employee wise, but see growth in all tech segments

5:50 pm - John from ? - Looking at new products coming down the pipeline... can we get a better idea of when to expect to see some new products come rolling out? No, the company will not discuss new product releases.

5:54 pm - Mark @ RBC Captial Markets - Do they think looking ahead that growth is going to be spurred by new products, or mostly coming from new products? Should be a nice combination of both. But most excited about Web 2.0. THink they are going to do to Web 2.0 what they were able to do to the internet back in the 90's.

5:57 pm - Guitan @ CIBC - Where do they see the challenges in adding to the headcount as fast as they are? Clearly they understand the problems in the US with only 60,000 engineers coming out each year. Finding it hard to get the top 10% of the yearly crop. See huge numbers of engineers coming out of China and India, and they will be in both of those markets.

6:00 pm - Aaron from AG Edwards - Looking at gross margins. What was drivers of the gross margins being haigher during this recent quarter? Mainly the team re focussed on margins, and the team just came up with a focussed, well executed plan to improve the margins.

And with that, this long conference call finally comes to a close. Stock is now trading up 5.9% as of the end of the call. Enjoy the rest of your evening.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.