NEW YORK (TheStreet) -- Though Cisco (CSCO) continues to see weakness in major emerging markets such as China, Russia and Brazil, the switching and networking giant is confident that it's positioned well in emerging markets overall and will look to continue acquiring companies in the future as well.
"Emerging markets were flat but we're down in the big three -- China was down 20%, Russia was down and Brazil was down double digits," CFO Kelly Kramer said in an interview. "The rest of our emerging markets business was up 6%, so we feel really good about how we're positioned."
For the third quarter, Cisco earned an adjusted 54 cents a share on $12.1 billion in revenue as product revenue rose to $9.32 billion in the quarter, up from $8.82 billion in the year ago quarter period. Gross margins during the quarter was 62.5%, with product gross margins at 61.8%, up 40 basis points compared to a year ago.
Analysts surveyed by Thomson Reuters expected the company to earn an adjusted 53 cents a share on $12.06 billion in revenue.
Cash flow from operations were $3.0 billion for the third quarter of fiscal 2015, compared with $2.9 billion for the second quarter of fiscal 2015, and compared with $3.2 billion for the third quarter of fiscal 2014. The company ended the quarter with $54.4 billion in cash, up from $53 billion at the end of the fiscal second quarter.
CEO John Chambers, who will step down from the top effective July 26, noted the company is continuing to work hard, despite the disruptions seen abroad, especially in China. "Our vision and strategy are working and we are executing very well in a tough environment, as evidenced in our revenue growth, profitability, strong gross margins and cash generation," Chambers said in a statement. "Our customers feel the pace of change and disruption in every industry and market, and know their success depends on digitizing their business."
Chambers is being replaced by Chuck Robbins, who was most recently the company's senior vice president of worldwide operations. He was responsible for the company's strategy in the enterprise business segment, and helped spearhead the Sourcefire and Meraki acquisitions.
Cisco has been hit by a slowdown in spending from some of the larger domestic telecom companies, with Kramer noting there's not a real improvement on spending. "We're still expecting spending to be down in the mid single digits. There have been some reports that spending might pick up in the second half of the year, but we're not assuming that."
Shares of Cisco ended the regular session higher, inching up slightly to end at $29.35.
On the earnings call, Chambers tried to ended speculation the San Jose-based Cisco would acquire security company FireEye (FEYE), but Kramer stated Cisco is keeping an open mind on acquisitions, not just in security, but all areas, including software and cloud.
"We'll continue to be very acquisitive in the future," Kramer said, without mentioning any possibility. "The security space is very interesting -- it's very fragmented and it's an area we'll always look to grow in, both organically as well as inorganically."