Chicago, Sept 15: Cisco Systems, the world’s largest maker of equipment that directs internet traffic, said its order backlog is up 14% from last year, boosting hopes that business is recovering. The California-based company said in a regulatory filing that its order backlog at September 8 was about $1.6bn, up from about $1.4bn at September 9, ‘02. The backlog includes orders for products to be shipped within 90 days and is used by analysts to gauge future sales.
“It tells you that business looks to be firming up and more importantly business looks to be less volatile,” said CIBC World Markets analyst Steve Kamman, who has a “sector perform” rating on Cisco and an “underperform” rating on the networking sector.
“That gives you some confidence that we’ve got a little more momentum behind any growth here, rather than some of the head-fakes we’ve seen in the last three years,” added Kamman, who does not own Cisco stock. CIBC has done banking for Cisco.
Cisco shares rose initially, bucking a broadly-weaker stock market dragged down by a fall in technology stocks. But the stock closed at $20.5, down 32 cents, on Nasdaq. Investors tend to see Cisco as a benchmark for corporate and government spending. Bureau Report