Networking and communications equipments manufacturer Cisco has posted a net income of $1.2bn or $0.22 per share for the fourth quarter ended 30 July 2011.

The company reported 4Q net sales of $11.2bn and non-GAAP net income of $2.2bn or $0.40 per share.

For the fiscal third quarter, which ended 30 April, Cisco’s net income had declined nearly 18% to $1.8bn, or 33 cents per share, compared to last year’s earnings of $2.2bn, or 37 cents per share.

Cash flows from operations were $2.8bn for the fourth quarter of fiscal 2011, compared with $3.0bn for the third quarter of fiscal 2011, and compared with $3.2bn for the fourth quarter of fiscal 2010.

Cash flows from operations were $10.1bn for fiscal 2011, compared with $10.2bn for fiscal 2010.

The company said that cash and cash equivalents and investments were $44.6bn at the end of fiscal 2011, compared with $43.4bn at the end of the third quarter of fiscal 2011, and compared with $39.9bn at the end of fiscal 2010.

"We’ve made significant progress on our comprehensive action plan to position ourselves for our next stage of growth and profitability, while delivering solid financial results in Q4," said Cisco chairman and CEO John Chambers.

"As we start our next fiscal year, you will see a very focused, agile, lean and aggressive company, that is laser focused on helping our customers use intelligent networks to transform their businesses."

Chambers told the Financial Times, "The big moves are largely over. We’re making progress."

Earlier this year, Cisco had revealed an "action plan" to maximise the strategic value of the network.

The company said, "To fully realise Cisco’s potential we know we must make some very important operational changes and clearly define our network- centric strategy…An integral component of the plan is our goal to take out $1 billion in costs from our fiscal 2012 expense run rate, and part of that is obviously tied to the size of our workforce."

Announcing the plan, the company revealed two decisions.
First, it would reduce its global workforce by approximately 6,500 employees across all functions.
Second, the company reached an agreement with Foxconn to take ownership of its 5,000-person manufacturing facility in Juarez, Mexico.

Chambers has been warning of tough measures ever since the company’s growth dived last year.

Sales of the company bounced back to growth after the economic recession in 2008, when it had embarked on a cost cutting programme. However, last year growth became sluggish again.

In November 2010, the company lowered sales growth projections. This year in February, it went for weaker margins. The financial forecast for the second quarter was also below analyst expectations.

For the fiscal third quarter, which ended 30 April, Cisco’s net income declined nearly 18% to $1.8bn, or 33 cents per share, compared to last year’s earnings of $2.2bn, or 37 cents per share.

Investors blamed Cisco for having too many diverse products, which was apparently accepted by Chambers.

Earlier this year, Chambers first announced that he would introduce radical steps to put the company back to growth.

Chambers had also said Cisco will focus on five key areas: routing, switching and services; collaboration; data centre ‘virtualisation’ and ‘cloud’ computing; architectures; and video.

Subsequently, in April, Cisco killed its Flip video camera business which it had bought for $590m in an acquisition in 2009. Nearly 550 jobs were slashed as a result of the move.