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Earnings Roundup

Cisco profit growth beats estimates

August 06, 2008|From Times Wire Services

Cisco Systems Inc. reported a 4% increase in quarterly profit Tuesday, beating analysts' expectations by a penny a share, but signaled that the weak economy would affect results in the next few quarters.

The world's largest maker of computer networking gear said it earned $2.01 billion, or 33 cents a share, in the three months that ended July 25, its fiscal fourth quarter. Cisco earned $1.93 billion, or 31 cents, in the same period last year. Sales rose 10% to $10.4 billion.

Excluding one-time items, earnings were 40 cents a share. Analysts had expected Cisco to report earnings of 39 cents a share on $10.3 billion in revenue, according to a Thomson Financial poll.

Chief Financial Officer Frank Calderoni said the results, coming in "a quarter of somewhat uncertain macroeconomic conditions," demonstrated the strength of Cisco's business model. However, the company's forecast for the first half of the current fiscal year showed signs of a pullback in customer spending.

Chief Executive John Chambers said revenue for the current quarter would grow by 8% from a year ago, suggesting revenue of $10.3 billion. Analysts had been expecting revenue of $10.4 billion.

For the following quarter, which ends in January, Chambers predicted revenue growth of 8.5%, pointing to sales of $10.7 billion. Analysts had been looking for $10.8 billion.

Investors seemed unfazed, sending Cisco shares up 92 cents, or 4%, to $23.57 in extended trading. The shares had gained 3% to close at $22.65 before the earnings report.

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