Cisco Reports Higher 1Q Sales, Earnings

By Matthew Fordahl  |  Posted 2003-11-05
SAN JOSE, Calif. (AP)—Cisco Systems Inc. posted higher sales and profits for its fiscal first quarter Wednesday, the strongest indication yet that corporate spending on networking equipment is rebounding after two years of declines.

For the three months ended Oct. 25, Cisco earned $1.09 billion, or 15 cents per share, compared with a profit of $618 million, or 8 cents per share, for the same period last year.

Sales jumped 5.3 percent, to $5.1 billion from $4.85 billion.

Excluding one-time items, the San Jose-based company earned $1.18 billion, or 17 cents per share. That compares with a profit of $1.04 billion, or 14 cents a share, a year ago.

On that basis, the results beat Wall Streets expectations. Analysts were expecting the company to post a profit of 15 cents per share on sales of $4.86 billion.

Cisco, the leading maker of routers and switches through which Internet and other network traffic pass, said as late as August that demand for its products remained weak. Unlike other networking companies, it stayed profitable with strict cost controls and market share gains.

"The business and technology strategies we put in place 18 to 36 months ago are showing tangible momentum," said Cisco chief executive John Chambers. "I am confident our strategies and strong execution throughout the downturn have positioned us well for future growth."

Earlier this week, the research firm IDC reported the information technology and telecom industries had returned to positive growth this year. Worldwide IT spending is expected to show 5 percent growth, to $916 billion, in 2004. Spending on telecom services is expended to jump 4 percent, to $1 trillion.

The results were announced after the markets closed. Earlier, shares of Cisco gained 22 cents, closing at $21.80 per share, in Wednesday trading on the Nasdaq Stock Market. They gained another $1.02 in extended trading.

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