Cisco System's quarterly profit surged 23 per cent as renewed interest in corporate infrastructure upgrades saw the network giant post its first sales increase in a year.
Chief executive John Chambers heralded the financial results as a "clear indication" that we're entering "the second phase of the economic recovery."
In addition to Cisco's dominance in switching and routers making it viewed as a technology industry bellwether, Chambers' often-sweeping statements make the company's quarterly reports somewhat of a state of the union address for business spending.
"In our opinion, based upon our business momentum and prior economic recoveries, this would indicate that the recovery from a capital spending perspective is very strong and moving into the second phase of a reasonably-balanced, across-the-board growth," he said in an analyst conference call on Wednesday.
Revenue in Cisco's second quarter 2010, which ended January 23, was $9.8bn, an 8 per cent increase from $9.1bn in the same period last year.
Adjusted net income for Q2 was $1.9bn, up 23.2 per cent from $1.5bn year-over-year.
The company exited the quarter with $39.bn total cash and investments and $2.5bn in operating cash flow.
Chambers also said the company expects to hire 2,000 to 3,000 people in the next several quarters - another sign of his confidence in an economic recovery. A year ago, the company was reporting sliding sales and profits, in addition to plans for job cuts of between 1,500 and 2,000 people company-wide.
Cisco expects to see revenue growth of 23 per cent to 26 per cent over a year ago by the end of its current fiscal third quarter. ®