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May 12, 2010

1 Min Read
Cisco Reports Probably Strongest Quarter in Its History

Cisco Systems Inc. (CSCO) just closed “probably the strongest quarter” in its history, as CEO John Chambers put it, after taking more network equipment orders than perhaps anyone expected.

To that point, Cisco earned $2.2 billion, or 37 cents per share, in the fiscal third quarter ended May 1, up from $1.3 billion, or 23 cents per share, a year ago. Revenue soared as well, from $8.2 billion to $10.3 billion. Cisco itself had predicted $10 billion or $10.3 billion in sales, while analysts were forecasting $10.2 billion.

The numbers are a stark reversal for Cisco. The company – the world’s largest networking-gear maker – suffered steep sales declines as the global recession slammed service providers and enterprises. But that all changed in the latest quarter. Cisco’s sales jumped 30 percent in Europe, 29 percent in North America and in all of its other geographic segments, producing results “we haven’t seen since before the global economic challenges began,” Chambers said in a prepared statement.

Cisco expects the financial momentum to continue, especially since earnings will incorporate the TANDBERG acquisition from now on. The California-based company said revenue should jump anywhere between 25 and 28 percent over last year. The forecast is higher than Cisco earlier publicized, but investors weren’t pleased. They already were looking for 25-percent growth and started selling off Cisco stock in after-hours trading.

Shares of Cisco closed 3 percent higher, at $26.74 on Wednesday, but fell 2.06 percent to $26.19 after the bell.

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