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Cisco CEO John Chambers on how uncertainties in Europe are impacting the company’s outlook.
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On it and we have had the opportunity is now.
Right now on Fox Business as we bring in Cisco's chief about his company's guidance and its future John Chambers joins us now from -- has quarters and John.
We wanted to let our viewers know that you always make yourself available to us after guidance you're not running or hiding from the story at all are you.
-- Liz and if you watch here in the quarter she said very well was an extremely strong quarter for Cisco is record revenues.
It was record earnings in record net income.
And we did exactly what we told the street view -- do not only for the last quarter but for the last year.
We're gaining market share vs most of our key competitors we're breaking away in the search about a market.
Where and the hot new areas such as CAD Ares have cloud the areas of video the areas -- mobility.
And we're proud about where we are we just tend to be very candid and honest to the best for our ability about what we're seeing in the market as we move forward.
Yes I'm just sticking up for you John that the Hulk.
Look we know the positives here executives you -- week you have the record quarter you streamlined but that guidance let's get to that because investors rush the exits because of that five brokerages have cut their price targets on the stock so I need to ask you what is the number one issue.
At the heart about lowered guidance what's the problem.
There -- two issues there's if I may expand it beyond -- the first and most major.
Is uncertainty in Europe and the fact that Southern Europe and some of the challenges -- spread to central and Northern Europe.
And is that gonna affect the -- a global issue.
The second part is uncertainty on CEO is not in the mid size companies but in the very large company's.
Bad until they see more predictability in terms of what's going to happen in Europe.
It can be more predictability and some of the government policies.
EC they have not -- on the brakes -- -- see them lifting up.
Their foot off the gas pedal to watch and -- that uncertainty that we're pretty shared with the market.
If we were indicating their long term down scenario we -- to -- -- that bluntly.
But we did said we're gonna do the same thing that our customers are going to do wouldn't take a step back watch to see what happens and then adjust appropriately.
I believe most of our customers believe in optimistic scenario for the second half of the year.
We just wanna see how things unfold before we say that term shareholder upset that I get now let me go back to the first one -- its Southern Europe please tell -- which countries.
-- the Southern Europe -- we all know Portugal Spain.
Greece across the Mediterranean area where the part -- -- -- challenged.
And we sold -- over the last several quarters as many of have you seen in the press.
What is change vs one quarter -- and by the way one quarter ago we said here that thinks we're watching.
Europe and the global economy secondly let's howl spending was occurring.
In our accounts know the which was disconcerting about -- spend it or not.
Both of those -- worse than the last quarter.
We -- that in terms of Central Europe I think about France through that section the UK.
Northern Europe I think about Germany -- the Scandinavian countries and as you've seen from their GDP numbers and others that section is challenged.
What we get his -- in terms prepared.
So it's just gonna ask the next -- worry the next worrisome country.
You talked about the southern countries and now you say maybe France really -- starting to look weak too because that was supposed to be one of the stronger economies there.
Well I think clears what -- seen in this is in Cisco talking.
What we saw in our business was that we saw decrease each year over year in France.
And year over year in Northern Europe and that's the first time we've seen that that was not in place just a quarter got -- -- Unfortunate we often tend to be a leading indicator what's -- to happen.
And that's part of the reason your -- record earnings and your transparent about your concerns in the stock gets.
Takes a major hit which is -- -- is the CEO as that occurs but -- believe trust is everything.
And we were always signal for the market what we believe is occurring in the market so I think -- as a -- was going to be tough.
For well John you just said that we're gonna do what our customers to take a stake batten stepped back wait NC.
You never struck me as a -- took a step back in fact when things got really ugly last year.
You -- without -- thousand jobs you streamlined you've got rid of some ideas on how to hold meetings because it wasn't fast enough it was clogging up the system.
So you're telling -- gonna sit back they've got to be something specific that you are doing at Cisco.
To generate business if not corporate business or government business which you say is it's drinking a little bit.
Where will you put all your energies to fight this.
Well this -- I can break your question the couple pieces.
We've always come to market transitions.
In our industry adding -- to give us credit for this better than any of our peers.
And we end up gaining more market share and more percentage of the total industry's market cap whether they're good transitions are not so we're pretty good at coming through -- Secondly as you said last year -- even though we were in the number one position many of our markets.
We felt we weren't changing rapidly enough is a company would become a little bit too fat the becomes slower in the decision process.
And what you saw -- do was reorganize our company around our customers -- we organize our field.
And you saw -- also over the last year every quarter gain market share a number of our peers and the fears or concerns that many people -- about how HP would be just a year ago or juniper sure.
Juniper is down in the mid single digits negative on the revenue growth.
And down in the market -- market by 20%.
HP we all know the challenges in the data center where many people thought -- -- we're going to 67%.
So we are positioned well for the future and we are -- we're ready -- you watch this focus gross margins have improved.
Our focus -- market leadership feels pretty good if we need to just we will.
We're gonna watch right now we say we don't need to.
It's the growth story over for Cisco John you hear some people say that.
Well when you're small company.
-- growth comes a lot easier in terms -- -- cents.
When your company is approaching fifty billion dollars and your major peers in the industry like a Microsoft -- And Oracle or an -- group or not BM great companies.
Are growing flat down a little bit or just slightly up.
-- -- growing dramatically faster than them and we think we can.
Are we gonna grow at twenty or 30% no but will we get -- more than our fair share market if we do our job -- in key industries absolutely will and we showed that insertion batter.
Where their market cap ex is going to percent maybe we -- in search about it we've gone between five and 12% over the --
