Cisco reports higher-than-expected quarterly revenue and profit
Higher-than-expected quarterly revenue and profit have boosted the confidence of Network equipment maker Cisco Systems to bolster growth in future as well. Cisco said strong demands for its products in the United States have played a key role in its earnings beyond expectations.
Cisco shares jumped nearly 4% in extended trading on Wednesday. Market research firm Gartner says that the company has maintained its reputation of being the market leader in selling network equipment to businesses. The company controls about half of the $38 billion global market and overshadows rivals Hewlett-Packard Co and China's Huawei Technologies Co Ltd.
A slowdown was seen in sales of the company's switches and routers because of lack of spending from telecom carriers, its traditional customers. However, latest results have showed that the company has recovered well.
CEO John Chambers said Cisco has faced many issues in the recent years, but the datacenter switching cycle is a particularly long one.
Convergence of switching, servers, storage and security is the key to the switching market, said Chambers, adding that security will enable them to do better than their competitors.
According to Needham & Co analyst Alex Henderson, rise of 7% in revenue in the Americas is a phenomenal achievement. The international markets are the matter of paramount importance for the entire market, said Henderson.
Cisco Systems is engaged in designing, manufacturing and selling Internet protocol (IP)-based networking products and services related to the communications and information technology (IT) business.
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