Cisco and Others Have Been Making Positive Comments About Carrier Spending

Though its enterprise hardware sales are slumping right now, Cisco Systems (CSCO) is seeing some improvement in its long-pressured sales to telcos and cable companies.

And Cisco might not be alone on this count, judging by what a rival and some chip and component suppliers have recently shared.

Cisco, which is up about 4% post-earnings today, disclosed on its Wednesday earnings call that orders from service provider clients fell 3% annually during its April quarter. That’s a healthy improvement from the 11% decline recorded for Cisco’s January quarter, not to mention the 21% drop seen during its October quarter.

Moreover, CEO Chuck Robbins said that service provider orders in the Americas, which were down 8% in the January quarter, rose by a mid-single digit percentage. He indicated that strong demand from cable companies looking to add capacity during COVID-19 lockdowns provided a boost, and that sales to heavy-spending internet/cloud giants — a group of companies that Cisco has limited exposure to, but is trying hard to make deeper inroads with — also grew.

Cisco’s disclosures come after routing arch rival Juniper Networks (JNPR)  disclosed on its April 28 earnings call that — although its sales to service providers were down 14% amid supply chain issues — its service provider orders saw 4% annual growth in Q1, their first quarter of growth since 2017. CEO Rami Rahim said that orders received a “modest” boost from COVID-19-driven investments, but insisted Juniper’s existing efforts to diversify its customer base played a bigger role.

But while Juniper downplayed the boost that it’s getting from an improved carrier spending environment, some, some of the chip and component vendors that have reported over the last seven days haven’t.

On its Monday earnings call, chip, component and materials supplier II-VI (IIVI) reported (in addition to blowout results and guidance) that it’s seeing an “overall acceleration” in optical network buildouts,…

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