Cisco's Q2 Profit Surges 40 Percent

Cisco Systems Inc.'s second-quarter profit surged nearly 40 percent as the world's largest maker of networking gear benefited from equipment upgrades to support bandwidth-hogging video downloads.

The company also raised its revenue guidance for the current quarter, apparently quashing analyst concerns about slowing growth as its customers complete the most extensive round of network upgrades since the pre-Y2K scramble.

Cisco shares jumped nearly 5 percent in extended-session trading.

For the quarter ended Jan. 27, Cisco's net income was $1.9 billion, or 31 cents per share, compared with $1.4 billion, or 22 cents per share, for the same period last year.

Excluding one-time charges, Cisco said Tuesday it earned $2.1 billion for the quarter, or 33 cents per share.

The San Jose-based technology bellwether, which makes the routers and switches that direct data over computer networks, said revenue for the quarter was $8.4 billion, a 27 percent jump from the $6.6 billion in the same period last year.

Analysts were expecting Cisco to earn, on average, 31 cents per share on $8.28 billion in revenue, according to a survey by Thomson Financial.

Cisco said $639 million of its sales came from Scientific-Atlanta Inc., the world's second-largest cable television box seller that Cisco acquired for $6.9 billion in the third quarter of last year.

"Cisco achieved record results that were well balanced across our geographies, products, services, customer segments and new markets," Cisco Chief Executive John Chambers said in a statement. "This illustrates our key competitive advantage of being able to develop a long-term vision, execute on our strategy and deliver consistent results."

Despite Cisco's phenomenal results in recent quarters, some analysts have expressed concerns about slowing growth as the initial boost from Scientific-Atlanta's sales wears off.

During a conference call, Chambers said the company expects third-quarter revenue to grow 19 to 20 percent over last year, when including results from Scientific-Atlanta.

Without Scientific-Atlanta, Cisco's standalone revenue is expected to grow between 15 and 17 percent, Chambers said.

The results were announced after financial markets ended regular trading. Earlier, shares of Cisco lost 23 cents to close at $27.28 on the Nasdaq Stock Market. Shares gained $1.30 in extended-session trading.


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