Cisco Profit Up 25%; Routers and Switches in Demand

SAN FRANCISCO, Aug. 7 (AP) — Profit at Cisco Systems jumped 25 percent in its fiscal fourth quarter as the company, which makes network equipment, continued to have strong sales of the routers and switches that direct traffic over the Internet.

Cisco shares jumped more than 5 percent on an improved financial forecast.

Net income for the period that ended July 28 was $1.93 billion, or 31 cents a share, compared with $1.54 billion, or 25 cents a share, during the quarter a year ago.

Excluding one-time charges, Cisco earned 36 cents a share, a penny above the estimate of analysts surveyed by Thomson Financial.

Revenue for the period was $9.43 billion, an 18 percent increase from the $7.98 billion in sales Cisco rang up last year. The revenue also beat Wall Street’s estimate, which was for $9.29 billion in sales.

In a conference call with analysts, Cisco’s chief executive, John T. Chambers, said the company was raising its revenue forecast to 13 percent to 16 percent growth for 2008 over 2007. For the current quarter, the company expects revenue of $9.45 billion to $9.55 billion, above the average analyst estimate of $9.39 billion.

Mr. Chambers also announced that the chief financial officer, Dennis D. Powell, would retire at the end of the second quarter of the current fiscal year. His successor will be Frank Calderoni, currently a Cisco senior vice president.

Cisco, based in San Jose, Calif., is profiting from widespread network upgrades as Internet service providers and other companies increase capacity to handle increasingly bandwidth-heavy downloads, particularly video.

Some analysts have expressed concerns, however, about whether Cisco can keep up its rapid growth. Investors have been particularly worried in the last couple of quarters about a slowdown in one of Cisco’s critical businesses — orders from United States businesses — whose growth plunged to mid-single-digit rates. That segment rebounded in the fourth quarter, growing about 12 percent over last year.

Cisco is also growing by moving beyond its roots as purely a maker of networking gear. During the fourth quarter, the company completed its $3.2 billion acquisition of an online meeting company, WebEx Communications, and the $830 million takeover of IronPort Systems, a maker of security products.

Shares of Cisco were up $1.74, or nearly 6 percent, to $31.43 in after-hours trading. Before the earnings were released, Cisco’s stock price closed up 19 cents at $29.69.

Link:www.nytimes.com