Net earnings for the period were $1.03 billion, or 14 cents per share, on revenues of $4.92 billion--a 58 percent increase over the year ago period. That compares with earnings of $649 million, or 9 cents per share, on revenues of $3.17 billion in the same period in 1999. Cisco's quarterly net income crossed the $1 billion mark for the first time this quarter.
Analysts expected Cisco to earn 13 cents per share, according to a survey by First Call.
Although Cisco's stock has come under pressure this week following an article in business magazine Barron's that questioned the company's valuation and acquisition strategy, shares have soared 131 percent over the past 12 months.
Cisco chief executive John Chambers said during a conference call that the company was having trouble finding enough hardware to build corporate networks. "We've seen increasing component shortages," he said.
Chambers added that Cisco could experience a "tight market" for components over the next two years.
During the quarter, Cisco completed the acquisitions of Aironet Wireless Communications and Pirelli Optical Systems for a combined price of $2.85 billion. Those company buys contributed one-time charges of $488 million, or approximately 6 cents per share for the quarter.
Including charges, net income for the third quarter was $662 million, or 9 cents per share, compared with $636 million, or 9 cents per share, for the same period a year ago.
As others have exited the corporate market, such as 3Com and IBM, Cisco experienced its best quarter ever for sales to business clients. The company reported sales growth of more than 20 percent sequentially for its enterprise business, led by 40 percent sequential growth in sales of its Catalyst 4000 and 6000 switching lines.
"We were very pleased with the results and the momentum we are seeing," Chambers said.
Cisco's service provider business grew in excess of 80 percent year over year and grew in the "high teens" sequentially. The growth was led by sales of Cisco?s high-end GSR 12000 routing device, which experienced 60 percent sequential growth and has an approximate run rate of $2 billion.
The company said the technology it acquired from Cerent last year will reach a $1 billion sales run rate next quarter.
Sales in routing hardware comprised 41 percent of Cisco?s total revenue for the quarter, while switching technology totaled 39 percent. Network access hardware represented 13 percent of total sales.
Cisco continues to reap the benefits of its growth at the bank with a total of $500 million per month in cash this quarter. The company now has $16.2 billion in available cash.