Cisco Systems Inc. (Nasdaq: CSCO) shares soared up 4 5/16 to a 52-week high of 130 1/8 Wednesday, one day after it beat Street estimates in its second quarter and set a 2-for-1 stock split.
In the quarter, Cisco earned $906 million, or 25 cents a share, on sales of $4.35 billion.
First Call consensus expected the world's largest network-equipment maker to earn 22 cents a share in the quarter.
It also announced a 2-for-1 stock, its fifth split in the past five years and ninth split since its debut in 1990.
The stock split will take effect on March 22 for shareholders of record on Feb. 22.
As a result of Wednesday's rally, Cisco surpassed General Electric Corp. (NYSE: GE) for the No. 2 market capitalization ranking on Wall Street worth more than $455 billion.
On Wednesday, Warburg Dillon Read, Banc of America Securities and PaineWebber all raised their 12-month price targets.
The $4.35 billion in sales represents a staggering 53 percent improvement from the year-ago quarter when it earned $609 million, or 17 cents a share, on sales of $2.85 billion.
Most analysts were projecting sales of around $3.9 billion in the quarter.
"The momentum of the Internet revolution continues to accelerate across both business and government sectors on a worldwide basis," said CEO John Chambers in a prepared release. "It is becoming increasingly evident that the adoption of Internet applications is key to success in the Internet economy."
During the quarter, Cisco completed its $7.15 billion purchase of Cerent Corp., a closely held maker of fiber-optic equipment and also agreed to acquire the optical-equipment unit of Pirelli SpA of Italy for $2.15 billion.
In a Tuesday afternoon conference call with analysts, Cisco executives reiterated their oft-stated goal of growing at or faster than industry rates.
"We continue to gain share in almost all our key markets," Chambers said.
The company maintained its usual cautious optimism, although Chambers said the third quarter historically has been one of Cisco's more challenging periods of the fiscal year.
Last quarter, Cisco beat the Street, raking in $837 million, or 24 cents a share, on sales of $3.88 billion.
Its shares fell to a 52-week low of 45 13/16 in March before hitting a high of 125 13/16 Tuesday.
All 39 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation on the stock.
-- Sergio G. Non contributed to this report.