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Cisco books back in the black
Chambers hails 'second phase of economic recovery'
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. ®