NETWORK EQUIPMENT maker Cisco Systems has posted stronger-than-expected quarterly results and said it expected the weak economic environment to be relatively short term.
Cisco's profit for the fourth quarter, which ended on July 26th, rose to $2 billion, or 33 US cents a share, from $1.9 billion, or 31 cents a share, a year ago. Earnings excluding exceptional items was 40 cents per share.
Quarterly revenue rose 9.9 per cent to $10.4 billion, surpassing $10 billion for the first time. Analysts on average had expected revenue of $10.3 billion.
Cisco employs 185 people in Ireland at a sales office in Dublin and a research facility in Galway. Last week the company said it was starting a recruitment drive for technical staff in Galway but did not put a figure on how many people it would hire.
Investors took heart from chief executive John Chambers' comment that he had "very strong" confidence in Cisco's long-term revenue growth target of 12 per cent to 17 per cent.
"Despite concerns of deterioration in its core market, Cisco reiterated its long-term growth guidance, giving jittery investors some comfort," said Mark Sue, an analyst at RBC Capital Markets. "A lot of people were worried that the number would have to come down."
Cisco, which sells routers and switches that direct web traffic, has benefited as global phone companies and large corporations upgrade their networks to meet growing internet use, but investors have been worried that a weaker economy could weigh on technology spending.
Cisco forecasts revenue growth of 8 per cent in the first quarter and 8.5 per cent in the second quarter.
Mr Chambers said he saw mixed signals in the economy, stock market and energy costs, but that the challenges would be relatively short term.
"While it is very difficult to predict when we may see a stronger spending environment by our customers and return to our 12 per cent to 17 per cent long-term growth objectives, our best estimate . . . is that the current economic challenges remain with us for the next few quarters."
Mr Chambers denied Cisco was in deal talks with any big companies regarding an acquisition. He was responding to a question about his interest in buying storage giant EMC. "We don't have any negotiations with any large companies at this time," Mr Chambers said in an interview broadcast on CNBC.
- (Reuters)
