Shares of Cisco Systems Inc. surged more than 18 percent Wednesday after the network equipment maker reported higher third-quarter profits that were ahead of expectations.
Investors drove up the shares despite executives' cautious stance on the company's future financial outlook, saying they expected little growth in the coming quarter. Cisco shares gained $2.40 to $15.48 in morning trading on the Nasdaq Stock Market.
Chief executive John Chambers said Cisco's customers still are waiting for better financial times to increase their Internet and networking gear spending, making it difficult to forecast long term.
News source: The Nando Times - Cisco shares surge after earnings report
Investors drove up the shares despite executives' cautious stance on the company's future financial outlook, saying they expected little growth in the coming quarter. Cisco shares gained $2.40 to $15.48 in morning trading on the Nasdaq Stock Market.
Chief executive John Chambers said Cisco's customers still are waiting for better financial times to increase their Internet and networking gear spending, making it difficult to forecast long term.
News source: The Nando Times - Cisco shares surge after earnings report
"It's just too tough to call," Chambers said Tuesday, though adding that he "feels better" going into the fourth quarter than he did entering the third.
For the three months ended April 27, Cisco earned $729 million, or 10 cents a share, compared with a $2.7 billion loss, or 37 cents a share, in the same quarter last year. Sales were $4.82 billion, up 2 percent from $4.73 billion in the third quarter last year.
Excluding special items, the company earned $838 million, or 11 cents a share, compared with profits of $230 million, or 3 cents a share, in the third quarter of 2001. It was the third straight quarter-to-quarter increase in profits and revenues.
"It was a nice bottom line quarter in a tough environment," said Martin Pyykkonen, an analyst with C.E. Unterbung, Towbin.
Analysts were expecting profits of 9 cents a share on revenue of $4.87 billion, according to a survey by Thomson Financial/First Call.
"We are very pleased with this quarter's performance," Chambers said. "The combination of our strong market position and solid execution by our team produced results that clearly indicate that Cisco is well positioned when the economy rebounds. Last year was a classic downturn. We took the critical steps to position ourselves for the upturn, and we are beginning to see the very positive results."
But Chambers said he expected little growth at Cisco during the next quarter while declining to forecast any farther down the road.
Cisco makes routers, switches and other devices that direct traffic over networks. The company, a high technology bellwether, was hard hit by the tech downturn and cutbacks in spending by telecommunications carriers and dot-coms.
The company, which had once boasted of hiring 1,000 employees a month, laid off 8,500 a year ago.
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