Cisco posts profit, but shares slip

Rising demand among corporate customers boosts its quarterly profit--but investors hoped for even stronger results.

Cisco Systems on Tuesday posted a higher quarterly profit on rising demand among corporate customers for its networking gear, but shares fell in after-hours trading as investors had hoped for even stronger results.

The world's largest maker of equipment that directs Internet traffic reported a net profit in its fiscal third quarter of $1.2 billion, or 17 cents a share, compared with $987 million, or 14 cents a share, in the year-ago quarter.

Excluding one-time items, Cisco earned 19 cents a share, compared with the 18 cents analysts were expecting according to Reuters Research.

Sales in the quarter ended May 1 rose to $5.62 billion from $4.62 billion last year, topping analysts' estimates for $5.55 billion, according to Reuters Research. Sales rose about 4 percent from the $5.4 billion posted in the preceding quarter.

In February, San Jose, Calif.-based Cisco said sales in its third quarter, historically its weakest, would rise 1 percent to 3 percent from the preceding quarter. However, this year's third quarter was one week longer than usual, leading some analysts to expect even stronger sales growth.

Shares fell to $21.80 in after-hours trading on INET from Tuesday's closing price on the Nasdaq of $22.25 as investors were mildly disappointed in the sales given Cisco's extra week in the quarter.

Story Copyright  © 2004 Reuters Limited.  All rights reserved.

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