Cisco Systems Inc reported a better-than-expected quarterly profit and outlook yesterday sending its shares up five per cent.
Cisco, which makes routers, switches and other network equipment, also raised its target for long-term revenue growth, citing growing demand for online video and other services that require faster internet speeds.
Cisco's fiscal fourth-quarter profit rose to $1.9 billion (€1.38 billion), or 31 US cents per share, from $1.5 billion (€1.09 billion), or 25 US cents per share, in the same period a year earlier.
Earnings excluding items were 36 US cents a share, beating the average analyst estimate by a penny.
Revenue also topped market expectations. Cisco shares rose 5.8 per cent in after-hours trading to $31.40 (€22.84), after closing at $29.69 (€21.60) on the Nasdaq.
The stock has risen by more than 70 per cent from a year earlier despite concerns about the US economy, as both communications service providers upgraded their networks to handle growing Internet traffic.
Quarterly revenue rose 18 per cent to $9.4 billion (€6.84 billion), topping both the average Wall Street forecast of $9.275 billion (€6.74 billion) and chief executive John Chambers' own estimate in May of revenue growth in a range of 15 per cent to 16 per cent.
At a conference, Mr Chambers gave first-quarter and full-year revenue forecasts that beat market expectations. He saw first-quarter revenue growing about 16 per cent year-on-year to $9.45 billion (€6.87 billion) to $9.55 billion (€6.94 billion) and forecast full-year growth of 13 per cent to 16 per cent.
They had also forecast fiscal 2008 revenue at $39.7 billion (€29.88 billion), or 13.6 per cent growth. Mr Chambers also raised Cisco's long-term revenue growth target to between 12 per cent and 17 per cent year-on-year, from a previous range of 10 per cent to 15 per cent.
Cisco said routing revenue in the fourth quarter rose 14 per cent year-on-year, while switching revenue grew 18 per cent.