Cisco Systems on Tuesday reported that its annual net income rose in fiscal 2003 to $3.6 billion, mainly on the strength of sales of Wi-Fi equipment and income from other new businesses.
Net income for Cisco's 2003 fiscal year, which ended July 26, was $3.6 billion, or 50 cents per share, on net sales of $18.9 billion. That compares with net income of $1.9 billion, or 25 cents per share, on net sales of $18.9 billion in the previous financial year.
The networking gear leader also reported fourth-quarter net income of $982 million, or 14 cents per share, on net sales of $4.7 billion. That compares with net income of $772 million, or 10 cents per share, on revenue of $4.8 billion in the same period last year.
Analysts whom research firm First Call surveyed had forecast fourth-quarter earnings of 15 cents a share on revenue of $4.7 billion. At the close of regular trading Tuesday, Cisco shares were down 40 cents to $18.86.
The results were not a surprise to most analysts, who expected Cisco to begin showing dividends from its recent purchases of security software vendor Okena and from its $480 million deal for Wi-Fi home networking gear maker Linksys, which has a 37 percent share of the market. The company, which is based in San Jose, Calif., sells about two-thirds of the world's routers.
"The investments and strategies of the past three years are paying off," Cisco CEO John Chambers said in a statement. "Advanced technologies in total exceeded 20 percent sequential growth, with IP (Internet Protocol) telephony, storage and optical growing the fastest in terms of orders."
During a conference call with analysts, Chambers said he believes that technology spending, especially among small and medium-size businesses, seems to be back in vogue after several years in decline. He admits that's a "minority view" now that telephone companies--major Cisco customers--have cut back on their own infrastructure spending.
"Things are starting to look better, but things are still fragile," Chambers said during the conference call. "External factors are starting to be more positive. I understand this is a minority view. But the economic recovery may be slowly gaining momentum."