Those looking for signs that the U.S. economy is stabilizing were cheered when Cisco Systems Inc. reported earnings up 18 per cent for the quarter that ended Oct. 27.
Cisco, the world’s biggest maker of network equipment said it had US$2.1 billion in net income on the quarter on sales of US$11.9 billion.
“We delivered record results this quarter — with revenue growth of 6 percent and strong earnings per share growth — demonstrating our vision and strategy are working,” CEO John Chambers said in a statement. “Our innovation engine, operational discipline and on-going evolution are enabling us to differentiate in the market.
The results were better than financial analysts expected, with the U.S. market showing the most growth and Europe remaining a weak spot.
Compared to previous years amid a booming IT economy, Cisco’s growth is fairly modest, but the company has been praised by financial analysts for making the best of a bad situation. Bill Kreher, a senior technology analyst at Edward Jones, told Reuters that Cisco seemed to be exercising “strong cost discipline.”
“Given concern about enterprise spending, the company seems to be bucking the trends,” he said. “The bar was low but the company did exceed those expectations.”
But the current quarter isn’t expected to go quite as well, with the networking giant expecting growth in the range of 3.5 to 5.5 per cent. Cisco CEO John Chambers also said Cisco is predicting that the situation in Europe will “get worse before it gets better,” Reuters reported.