Strong fourth-quarter results at Cisco Systems
California-based company says profit, excluding some items, was 52 cents a share
Network equipment maker Cisco Systems yesterday reported fiscal fourth-quarter revenue in line with Wall Street expectations on continued strength in its enterprise business. Photograph: Mike Blake/Reuters
Cisco Systems, the biggest maker of networking equipment, reported fiscal fourth-quarter profit and sales in line with estimates as surging Internet traffic from smartphones and tablets lift demand for the company’s products.
Profit, excluding some items, was 52 cents a share, while revenue rose 6 per cent to $12.4 billion, the California- based company said. Analysts on average had projected profit of 51 cents and sales of $12.4 billion. Cisco is benefiting from growing use of web video and mobile devices that strain data networks and require the purchase of more routers, switches and servers.
Investors were predicting a strong quarter from Cisco because spending by US corporations and other markets have been improving, according to Jayson Noland, an analyst at Robert W Baird and Co in San Francisco. “People were expecting a fiscal fourth-quarter beat,” said Noland. “If there’s something wrong somewhere in Cisco, given how well things have been going, investors would expect Cisco to make up the difference somewhere else.”
Cisco fell in extended trading. The shares advanced less than 1 per cent to $26.38 at the close in New York, leaving them up 34 per cent this year. Net income rose 18 per cent to $2.27 billion, or 42 cents a share, from $1.92 billion, or 36 cents, a year earlier.
After stumbling amid competition from Hewlett-Packard, Juniper Networks and China’s Huawei Technologies, Cisco has regained its footing with new products and increased spending by companies and some government agencies, according to Noland. “They went through a lot – it kind of spiraled out of control there for a little bit but they have come back with a lot of strength.”