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Cisco's Chambers Drenches FireEye Acquisition Rumors

Cisco CEO John Chambers indirectly doused chatter that the networking vendor has put in a $9 billion bid for advanced threat detection company FireEye.

As rumors flew going into Wednesday's third-quarter earnings call, Cisco CEO John Chambers indirectly doused rumors that the networking vendor had put in a $9 billion bid for advanced threat detection company FireEye.

"We don't comment on acquisitions that haven't been announced, but I wouldn't count on the one that you may be hearing about today," Chambers said on the earnings call in response to a general question about possible upcoming acquisitions.

Wednesday afternoon, FireEye's stock soared on market rumors reported by Seeking Alpha and Nasdaq that Cisco had put in a $9 billion bid, closing up 5.23 percent at $43.46. After Chambers indirectly addressed the issue, FireEye's stock was back down in after-hours trading, dropping 3.87 percent, to $41.78.

[Related: Top 5 Moneymaking Security Certifications For 2015]

Spokespeople for Cisco and FireEye declined to comment, both saying that they don't comment on rumors or speculation.

The Cisco earnings call was highly anticipated, as it would be the first call after the announcement that Chuck Robbins would be stepping in as CEO on July 26. For its third fiscal quarter, ended April 25, Cisco reported earnings of $2.44 billion, up nearly 12 percent from the year-ago quarter. Its sales climbed more than 5 percent, to $12.14 billion, compared with last year.

Last week, Robbins said in a news conference that analysts and partners could expect the networking vendor to ramp up its investments around security, saying "you'll see us invest [an] even greater amount there." On the third-quarter earnings call, Robbins reiterated that, under his leadership, Cisco would continue to invest in mergers and acquisitions.

"When it comes to mergers and acquisitions, Cisco leverages its go-to-market, scale and channel to accelerate growth," Robbins said on the earnings call.

Robert Keblusek, senior vice president of business development at Downers Grove, Ill.-based Sentinel Technologies, said he thought FireEye would make a good addition to the Cisco Security portfolio, particularly enhancing the company's central management capabilities.

"I think it would be an excellent add," Keblusek said. "From what I know of it, it actually is a very good fit. It could become a central portion of their portfolio."

Richard Delaney, chief technology officer and network engineer at Sloatsburg, N.Y.-based Delaney Computer Services, a Cisco partner, said there have been a lot of rumors about Cisco acquisitions over the years, some of which came true and many of which didn’t. Even if the rumor does prove to be true, Delaney said the proof is in the pudding when it comes to integrating the technology and bringing it to market for partners.

"I'll believe it when I see it," Delaney said.

PUBLISHED MAY 13, 2015

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