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Is technology spending continuing to rebound?

May 12, 2010

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Cisco Systems today reported sales and profits that beat analysts' expectations, suggesting that technology spending might continue to rebound.

The network equipment and infrastructure giant said net income rose to $2.2 billion, or 37 cents per share, in the quarter ended May 1st, compared with $1.8 billion, or 30 cents a share, in the corresponding 2009 period.

Excluding certain specific items, Cisco said it earned a total of $2.5 billion, or 42 cents per share.

Wall Street analysts surveyed by Thomson Financial, who typically exclude one-time items from their estimates, forecasted earnings of 39 cents per share.

Actual sales rose 27 percent in the quarter to $10.4 billion. Analysts had expected sales of $10.2 billion.

CEO John Chambers hailed the past 3 months as "probably the strongest quarter in Cisco's history."

Shares of Cisco were essentially flat in after-hours trading following the company's earnings announcement after the market closed. They ended regular trading today up about 3.1 percent, at $26.74.

"On almost every measurement perspective -- revenues, earnings per share, new products, successful acquisitions and internal startups the quarter offered proof points that our strategy is working," said Chambers.

"It's clear that our game plan for how to handle economic downturns is hitting on all cylinders," he added.

As is usually the case, Chambers didn't offer any guidance for the balance of the year, however.

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Source: Cisco.