Cisco Systems Inc., the world's largest maker of computer networking
gear, said Tuesday that U.S. companies are starting to spend again,
helping Cisco find more solid footing after some shaky months early this
Cisco said its earnings rose 18 percent in the latest quarter,
propelled by a renewed willingness by large U.S. businesses to invest in
big-ticket networking gear, even as the federal government continued to
hold back. Orders from large business customers in the U.S. rose 9
percent from a year ago.
That helped make up for continued weakness in Europe, where economic turmoil is still causing a big drop-off in orders.
U.S. has to lead the total globe out of this slowdown. It's not going
to come from Europe. While we were all hopeful about emerging countries,
they just aren't going to be strong enough," CEO John Chambers said.
The company's stock rose $1.19, or 7.1 percent, to $18.04 in extended trading Tuesday.
made $2.1 billion, or 39 cents per share, in its fiscal first quarter,
which ended Oct. 27. That compares with $1.8 billion, or 33 cents per
share, in the same period a year ago.
Excluding the cost of
stock-based compensation and certain other items, Cisco would have
earned 48 cents per share. On that basis, Cisco's earnings were 2 cents
above the average analyst estimate, according to FactSet.
rose 5.5 percent to $11.9 billion, beating Wall Street estimates.
Excluding the acquisition of video technology company NDS, which closed
just before the end of the quarter, revenue would have risen 4 percent.
San Jose, Calif., company forecast earnings for the current quarter of
47 cents to 48 cents per share. Analysts have been expecting 48 cents
per share. The company projected revenue of $11.9 billion to $12.1
billion, bracketing the average analyst estimate.
As has been the
trend this year, sales of Cisco's core products, routers and switches,
were weak, while some up-and-coming product categories such as wireless
network equipment and servers for data centers sold briskly. Cisco's
service segment also continued to be strong, with revenue growing 12
percent from a year ago, as customers ask Cisco to build their networks