Cisco earnings up 4 percent, beating forecasts
Cisco Systems Inc. said Tuesday that sales would be weaker than analysts had forecast in the next few quarters, but investors who had expected worse were cheered. The world’s largest maker of computer networking gear said orders would grow 8 percent in the current quarter, as customers, particularly telecom carriers, pinch their money. Investors had been expecting the weak economy to catch up to the company. It’s the dominant player in an industry that has been growing dramatically, but at the same time, its routers and switches are capital investments, the kind that suffer in an economic downturn.
Cisco shares were up $1.58, or 7 percent, at $24.25 in extended trading after the release of the results. The stock has slid from the year’s high of $27.72 set June 5 as investors prepared for a weak forecast. For the fiscal fourth quarter that ended July 25, Cisco reported earnings of $2.01 billion, or 33 cents per share. In the same period last year, Cisco earned $1.93 billion, or 31 cents per share. Sales rose 10 percent to $10.4 billion. Excluding one-time items, earnings were 40 cents per share. Analysts had expected Cisco to report earnings of 39 cents per share on $10.3 billion in revenue, according to a Thomson Financial poll. Chief Financial Officer Frank Calderoni said the results, coming in “a quarter of somewhat uncertain macroeconomic conditions,” demonstrated the strength of the company’s business model.
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