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Cisco beats forecasts, points to recovery
By Reuters
A sign shows the headquarters of Cisco Systems Inc. in San Jose, California May 6, 2008. REUTERS/Robert Galbraith
NEW YORK (Reuters) - Cisco Systems Inc's <CSCO.O> quarterly revenue rose more than expected from the previous quarter, showing businesses are beginning to invest in network equipment after cutting back on spending for the past year.
The shares, which have climbed more than 40 percent since the start of the year, rose around 3 percent after-hours on Wednesday. Many investors are awaiting Cisco's revenue outlook, expected in a conference call that begins shortly.
Cisco said that for the quarter ended October 24, revenue fell 13 percent from a year earlier to $9.0 billion. But that was up 6 percent quarter-on-quarter, and higher than the average Wall Street forecast of $8.7 billion, according to Thomson Reuters I/B/E/S.
Net profit was $1.8 billion, or 30 cents a share, compared with $2.2 billion, or 37 cents a share, a year earlier. Excluding items, profit was 36 cents a share compared to 42 cents a share a year earlier, and higher than the average Wall Street forecast of 31 cents.
It also said the board of directors authorized up to $10 billion in additional share repurchases.
Cisco is the world's top vendor of routers, switches and other network equipment used by global businesses, including phone companies as well as governments.
Many of those customers had put off large investment decisions during the recession, but analysts have said many were beginning to shift gears toward more spending to cope with growing Internet traffic.
(Reporting by Ritsuko Ando; Editing Bernard Orr)
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