Jay, Cisco joins Bush's campaign <<Cisco creates 1,000 jobs as spending recovers>>
By Simon London in San Francisco
Published: May 11 2004 22:53 | Last Updated: May 11 2004 22:53
Cisco Systems, the California-based supplier of networking equipment, provided further evidence of a recovery in technology spending by announcing third quarter revenues and earnings ahead of Wall Street expectations.
John Chambers (pictured), chief executive, said that the results reflected "sequential order growth across all major product categories" but added that demand from US businesses was especially strong.
"Adjusting for seasonal factors, this is the first major growth we've seen in the US enterprise segment for a very long time. CEOs are starting to slowly loosen their purse-strings on capital spending", he said.
After four years of downsizing, Cisco also unveiled plans to add 1,000 employees during the remainder of this calender year. Most of the new jobs will be located in the US, spread across sales and engineering.
Mr Chambers' comments are likely to reassure investors that demand for information technology products such as computers and networking equipment remains on track for a modest recovery this year.
Other big technology companies, including International Business Machines, have also pointed to a steady increase in demand.
Cisco recorded sales of $5.6bn in the three months to April, an increase of 22 per cent over the same period of 2003.
Mr Chambers said that sales of equipment, as opposed to services, increased by more than 25 per cent for the forth consecuutive quarter.
Earnings per share were 17 cents under US generally accepted accounting principles, up from 14 cents.
On a pro-forma basis, earnings per share were 19 cents, up from 15 cents. Wall Street analysts had anticipated pro-forma earnings of 18 cents.
Dennis Powell, chief financial officer, said that Cisco generated $2.4bn cash from operations during the quarter, the strongest in the company's history.
Cisco spent $3bn during the period buying back its own stock, leaving it with cash and total investments of $18.9bn.
Mr Powell said that Cisco had authority to buy back a further $5bn of stock during the remainder of its financial year.
The company also completed two small acquisitions, paying $36m for Riverhead Networks and $5m for Twingo Systems.
Cisco shares closed up 2.9 per cent at $22.25 on Tuesday in New York. |
