Cisco Says 1Q Showing Indicates Signs Of Recovery - InformationWeek

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11/6/2003
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Cisco Says 1Q Showing Indicates Signs Of Recovery

The networking vendor's profit nearly doubled from a year earlier, while sales climbed more than 5%.

Cisco Systems says its first-quarter earnings indicate surprisingly strong growth in core businesses as well as a potentially burgeoning economic recovery.

"We're starting to see the first glimmers of an overall improvement in the economy," says Charlie Giancarlo, senior VP and general manager of switching, voice, and carrier systems. Cisco's revenue growth "didn't just come from one segment of the business, it was fairly broad based."

For the quarter ended Oct. 25, Cisco posted a net profit of $1.09 billion, or 15 cents per share, up from $618 million, or 8 cents per share, in the same quarter of 2003. Revenue were $5.1 billion, up 5.3% from $4.8 billion a year ago. It's the first time in years in which Cisco's sales have passed the $5 million mark. "We've been waiting for about two and a half years to do this," says Giancarlo.

Sales of Cisco's core business of routers and switches were particularly robust, with "very strong" growth in sales to service providers, according to Giancarlo.

In a conference call Wednesday, CEO John Chambers said the company expects revenue to continue to rise in the second quarter, coming in around $5.2 billion. Chambers remained cautiously upbeat about whether Cisco sees the beginning of an economic recovery, but did indicate that the business executives he speaks to feel increasingly optimistic.

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