Cisco's Chambers: Recovery Slowly Gaining Momentum

"Recovery appears to be slowly gaining momentum but is still fragile in the minds of our customers," Chambers said Wednesday during a conference call to discuss the company's first quarter fiscal 2004 financial results.

Chambers pointed to strength in Cisco's core routing and switching technologies and better-than-expected growth in its service provider business as signs of a fledgling recovery.

For the quarter ended Oct. 25, the company's sales climbed more than 5 percent to $5.1 billion, up from $4.8 billion the same quarter a year ago. Compared to the fourth quarter of fiscal 2003, revenue increased more than 8 percent from $4.7 billion.

Cisco reported a profit for the quarter of $1.1 billion, or 15 cents per share, up 76 percent from $618 million, or 8 cents per share, for the same quarter last year.

Sponsored post

On a pro forma basis, Cisco earned $1.2 billion, or 17 cents per share, compared to $1.0 billion, or 14 cents per share, in the same quarter a year ago.

Financial analysts expected the San Jose, Calif.-based company to report earnings of 15 cents per share on revenue of $4.86 billion.

Cisco also saw 15 percent sequential growth in advanced technologies, which accounted for 14 percent of the company's total revenue, with the best growth coming from home networking, security, optical and IP telephony, Chambers said.

The vendor's Linksys home networking division, acquired in June, brought in $140 million in orders and $119 million in recognized revenue during the quarter, he said.

Charlie Giancarlo, senior vice president and general manager of switching, voice and storage at Cisco and president of Cisco-Linksys, said Cisco did well across technology segments. "Especially we were pleased that the results that came in were really quite solid across the board," he said during an interview with CRN following the conference call. "The fact that we had a good quarter didn't come from any specific one segment or geography or technology, but really most, if not all, of our areas were coming in at or above the plan that we had put in place at the beginning of the fiscal year."

For the second quarter, Cisco expects to report sequential revenue growth of 1 percent to 3 percent.

Shares of Cisco closed up 22 cents at $21.80 Wednesday prior to the announcement and continued to climb by more than 5 percent in after-hours trading.