Cisco Systems Inc posted a 41 percent jump in earnings for its fiscal fourth quarter Tuesday as the networking giant continued to benefit from corporate spending and success as it branches beyond its core business of routers and switches.
The company also said it expects sales to grow in the current quarter, which is traditionally one of the weakest. Still, its optimism is tempered slightly given recent softness in the economy, said John Chambers, Cisco's chief executive.
"In things we can control, I feel very good," he said. "I think most of our customers are little bit more cautious ... versus what they were a couple months ago. I would not say that's a major factor."
The stock price fell more than 5 percent in extended-session trading after its otherwise positive results were announced.
"For such a good quarter, you'd expect them to have something better to say about the future," said David Willis, an analyst at the Meta Group research firm.
"Characteristic of Cisco, they refused to do that and were actually talking more cautiously about the future," he said.
But for the three months ended July 31, Cisco earned US$1.4 billion, or US$0.20 per share, compared with profits of US$982 million, or US$0.14 per share, in the same period last year.
Sales rose 26 percent in the fourth quarter, to US$5.9 billion from US$4.7 billion last year.
Excluding special items, Cisco's fourth-quarter earnings totaled US$1.5 billion, or US$0.21 per share, compared with US$1.1 billion, or US$0.15 per share, last year.
On that basis, Cisco narrowly beat Wall Street expectations. Analysts were expecting Cisco to earn US$0.20 per share on sales of about US$5.9 billion, according to a survey by Thomson First Call.
Cisco said its performance was due to its success in growing its routing and switching market share as well as expanding into other markets and products such as Internet telephony, home networking, security and storage.
"This was a record-breaking quarter for Cisco on a number of financial and operational levels," Chambers said. "The investments we've made in emerging markets around the world, coupled with continued innovation in our core business and advanced technologies, are generating record results."
Cisco saw continued strength around the world, though the US showed the strongest growth.
Last quarter, Cisco announced it would be adding 1,000 engineering and sales positions, mostly in the US, by the end of the calendar year. By the end of the fiscal fourth quarter, it reported a net increase of 64 jobs, excluding acquisitions, bringing total headcount to 34,371.
Dennis Powell, Cisco's chief financial officer, said he expects the hiring pace to pick up in the current quarter.
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