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Cisco posts lower net profit, sales rise
Chicago, Feb 04: Cisco Systems Inc., the world`s largest maker of equipment that directs Internet traffic, on Tuesday posted a lower quarterly net profit, but sales rose more than expected as corporate customers boosted technology spending.
Chicago, Feb 04: Cisco Systems Inc., the world's largest maker of equipment that directs Internet traffic, on Tuesday posted a lower quarterly net profit, but sales rose more than expected as corporate customers boosted technology spending.
The company also forecast sales in the current quarter, its fiscal third, would rise as much as 3 percent. The quarter is historically the company's weakest.
The San Jose, California, company reported a net profit in its fiscal second quarter of USD 724 million, or 10 cents a share, compared with USD 991 million, or 14 cents a share, in the year-ago quarter. Sales in the quarter ended January 24 rose by almost 15 percent from last year to USD 5.4 billion, above the USD 5.29 billion analysts had expected according to Reuters Research. Sales also were up 5.8 percent from the previous quarter, topping the 1 percent to 3 percent growth forecast Cisco provided last November. Cisco shares, which saw a decent run up this year, fell 4 percent in after-hours trade as analysts said investors were hoping for even more.
"People were expecting a blowout quarter and Cisco just gave us good numbers," said CIBC World Markets analyst Steve Kamman, who has a "sector perform" rating on the stock and does not own shares.
"You can either blame Cisco or you can blame people for getting ahead of themselves," he added. "Cisco is doing very well given the reality of the economy out there."
Investors see Cisco as a benchmark for corporate and government spending because about 75 percent of its revenue comes from those customers. The rest comes from the telecom sector, where spending appears to be stabilizing and even increasing in areas Cisco serves, including Internet voice transmission.
Bureau Report
The company also forecast sales in the current quarter, its fiscal third, would rise as much as 3 percent. The quarter is historically the company's weakest.
The San Jose, California, company reported a net profit in its fiscal second quarter of USD 724 million, or 10 cents a share, compared with USD 991 million, or 14 cents a share, in the year-ago quarter. Sales in the quarter ended January 24 rose by almost 15 percent from last year to USD 5.4 billion, above the USD 5.29 billion analysts had expected according to Reuters Research. Sales also were up 5.8 percent from the previous quarter, topping the 1 percent to 3 percent growth forecast Cisco provided last November. Cisco shares, which saw a decent run up this year, fell 4 percent in after-hours trade as analysts said investors were hoping for even more.
"People were expecting a blowout quarter and Cisco just gave us good numbers," said CIBC World Markets analyst Steve Kamman, who has a "sector perform" rating on the stock and does not own shares.
"You can either blame Cisco or you can blame people for getting ahead of themselves," he added. "Cisco is doing very well given the reality of the economy out there."
Investors see Cisco as a benchmark for corporate and government spending because about 75 percent of its revenue comes from those customers. The rest comes from the telecom sector, where spending appears to be stabilizing and even increasing in areas Cisco serves, including Internet voice transmission.
Bureau Report