Cisco tops 3Q expectations
Cisco Systems (Nasdaq: CSCO) edged past the consensus estimate in the third quarter.
After market close Tuesday, the maker of network routers and switches reported fiscal third quarter pro forma net income of $1.03 billion, or 14 cents per share, excluding one-time charges, taxes related to options and gains on some investments. First Call's survey of 34 analysts predicted a profit of 13 cents per share for the quarter ended April 29.
Including all items, Cisco earned $662 million, or 9 cents per share. Cisco recorded a non-recurring expense of $488 million, or 6 cents per share, to write-off in process R&D at Aironet Wireless and Pirelli Optical Systems, which were acquired during the third quarter.
Shares of Cisco rose to 63 3/16 in afterhours activity on the Island electronic communications network, immediately following the earnings announcement. The stock closed Tuesday's regular trading at 62 3/4, unchanged for the session.
Third quarter revenue increased to $4.92 billion, up 55 percent from $3.17 billion in the year-ago period. Business from communications carriers continues to grow most rapidly, although Cisco's traditional enterprise business saw its best quarter in two years, executives said.
"We continue to gain market share in all our key markets," Cisco CEO John Chambers said during a conference call with analysts. "We continue to be very optimistic about our role in the Internet economy as the leader in the Internet revolution, assuming we execute properly."
Company executives remained upbeat about long-term growth.
"We continue to believe that the part of the industry in which we participate will continue to grow 30 to 50 percent in countries with strong economies," Chambers told analysts. "We see no major changes in that model for the next several years. In fact, we are more optimistic ... than at any point in the last several years."
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