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Cisco beats 4Q forecasts

Another quarter, another round of higher-than-expected earnings for Cisco Systems (Nasdaq: CSCO).

After market close Tuesday, the networking equipment giant reported fiscal fourth quarter net income of $1.2 billion, or 16 cents per share, excluding special charges. First Call consensus predicted a profit of 15 cents per share for the quarter ended July 29.

Shares of Cisco rose to 67 3/4 in afterhours activity on the Island electronic communications network, immediately following the earnings release. Cisco, which usually tops First Call predictions, closed Tuesday's regular trading at 65 1/2, down 3/4 for the session.

Including costs related to acquisition, taxes on stock option exercises and gains from minority investments, Cisco earned $796 million, or 11 cents per share.

Fourth quarter revenue increased to $5.72 billion, a 61 percent gain year-over-year, 16 percent improvement sequentially and higher than many analysts expected.

For the full fiscal 2000, Cisco earned $3.91 billion, or 53 cents per share, not counting special charges. If all costs and gains are included, Cisco reported full year net income of $2.67 billion, or 36 cents per share, on revenue of $18.93 billion.

The company posted a pro forma profit of $727 million, or 21 cents per share, on sales of $3.55 billion in the fourth quarter a year ago. For the full fiscal 1999, Cisco reported a pro forma profit of $2.55 billion or 75 cents per share on revenues of $12.15 billion.

Analysts generally expected the company to meet fourth quarter earnings estimates or beat them by a penny per share. The biggest concern nowadays is that the company may not be able to keep its torrid growth rates going.

Cisco observers will be looking at the ASP and ISP market. "That's where the top line growth number will come in," said Craig Johnson, principal at the PITA Group. "Their business is shifting more and more that way. That's what they've been saying for a while now."

• Can Cisco keep up the pace?>