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Cisco income jumps

The networking giant posts another profitable quarter and declares a 3-for-2 stock split.

Networking giant Cisco Systems posted another profitable quarter and declared a 3-for-2 stock split.

The company posted net profits of $491.7 million (45 cents per diluted share) compared with a net income of $150.9 million (14 cents) for the same period a year ago. Pro-forma net income, which excludes certain write-offs, was 48 cents per share in the latest quarter.

"Overall we are very pleased [with the results], especially given the economic challenges in Asia," chief executive John Chambers said during a conference call. "Competition continues to intensify. We expect mergers and partnerships to occur with increasing frequency," he added.

Today's earnings results approximated analysts' expectations of 47 cents a share for the quarter, according to First Call.

Revenues for the quarter were $2.39 billion, up from sales of $1.77 billion for the same period last year.

Cisco has not experienced the sales hiccups that has affected competitors such as 3Com, Cabletron Systems, and Bay Networks in recent quarters. However, the company warned in its conference call that "our gross margin will decline over time."

For the full year, Cisco posted revenue of $8.46 billion, up 31 percent from the previous year.

The industry bellwether's stock has experienced a slight dip in recent days after breaking through the $100 barrier. Cisco's earnings announcement comes amid a plethora of uncertainty and reduced expectations in the networking market.

Even as the Cisco cash cow rolls on, the dynamics of the networking sector are changing rapidly, leading some to view the company's position as less certain than in previous years. Nevertheless, the firm continues to enjoy a dominant position in several of markets for data networking equipment.

Cisco increasingly finds itself competing against well-heeled competitors and new players such as data equipment provider Lucent Technologies.