It cites strong demand for fourth quarter profit of US$1.9bil
NEW YORK: Cisco Systems Inc reported on Tuesday better-than-expected quarterly profit and outlook citing strong demand from telecoms carriers for advanced network equipment.
Cisco, which makes routers, switches and other network equipment, also raised its target for long-term revenue growth, citing growing demand for online video and other services that require faster Internet speeds.
Chief executive John Chambers dismissed market concerns that Cisco could be hurt by slower US economic growth.
“I know there have been a number of mixed views about the strength of the US IT spending, especially in large accounts. I am very pleased to share with you not only that our US business was very strong, but the balance was good across all customer segments,” he told analysts on a conference call.
Cisco's fiscal fourth-quarter profit rose to US$1.9bil, or 31 cents per share, from US$1.5bil, or 25 cents per share, in the corresponding period a year earlier. Earnings excluding items were 36 US cents a share, beating the average analyst estimate by a penny, according to Reuters Estimates.
Revenue also topped market expectations.
“When things are going well, as they are right now, they have enough flexibility that they can beat on a regular basis,” said J.P. Morgan Securities analyst Ehud Gelblum. “Gross margin was 65%. The guidance is usually 64% to 65%. It's certainly on the good side.”
Quarterly revenue rose 18% to US$9.4bil, topping both the average Wall Street forecast of US$9.275bil and Chambers' own estimate in May of revenue growth in a range of 15% to 16%.
On the conference call, Chambers gave first-quarter and full-year revenue forecasts that beat market expectations.
He saw first-quarter revenue growing about 16% year-on-year to US$9.45bil to US$9.55bil, and forecast full-year growth of 13% to 16%.
Chambers also raised Cisco's long-term revenue growth target to between 12% and 17% year-on-year, from a previous range of 10% to 15%. – Reuters