New York, Aug 09: Cisco Systems Inc. on Tuesday posted better-than-expected quarterly profits and gave a strong outlook, saying its market share grew as companies upgraded their networks, lifting its stock more than 9 percent.
John Chambers, chief executive of the world's top maker of routers and switches that direct Internet traffic, said its "momentum remains strong," surprising analysts who had expected more caution amid a slowing economy.
"Going into Q4, we did share some caution and this concern appears to be appropriate, at least on a macro and general technology spending level," Chambers told analysts on a conference call.
But he said Cisco's latest results showed it was winning market share, and forecast double-digit revenue growth in the current quarter.
Cisco said sales for its fiscal fourth quarter ended July 29 rose to $7.98 billion from $6.6 billion, topping the average Wall Street forecast of $7.92 billion, according to estimates.
Profit excluding special items was $1.9 billion, or 30 cents per share, compared with $1.6 billion, or 25 cents per share a year earlier. Analysts, on average, had expected $1.79 billion, or 28 cents per share.
"The revenue number is pretty good. It beat the general consensus," said Sunil Reddy, a senior portfolio manager at Fifth Third Asset Management. "You put that in the background of a decent valuation and the anemic technology market and Cisco has delivered a pretty good number."
Cisco's results, often regarded as a bellwether for technology companies, may help to turn some of the negative sentiment that has dogged technology stocks in recent months.
Cisco's shares had fallen around 10 percent over the past 12 months amid concerns about slower business spending and consolidation in the telecommunications industry, although smaller rival Juniper Networks had shed around 45 percent.
Cisco rose $1.637, or 9.5 percent, in after-hours trading on the Inet electronic brokerage system after closing at $17.29 on Nasdaq on Tuesday. Juniper's shares rose 2.6 percent in post-market trade.