Cisco Profit Plunges but Tops Estimates

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NEW YORK (Aug. 5) - Cisco Systems Inc. said earnings fell 46 percent in its latest quarter, but the profit beat Wall Street expectations, and the company said the quarter may have been the bottom of the recession-related downturn.

"We saw a number of positive signs this quarter in the economy and in our business," CEO John Chambers said in a statement. He added that if trends keep improving, there's a good chance the latest quarter was a "tipping point."

As the world's largest maker of computer networking gear, Cisco has seen sales hit hard as clients delayed investments and capital improvements. However, good profit margins and a large pile of cash have helped it ride out the downturn.

The San Jose, Calif.-based company posted a profit of $1.1 billion, or 19 cents per share, for the fiscal fourth quarter, which ended July 25. That was down from $2 billion, or 33 cents per share, in the same quarter last year.

Sales fell 18 percent to $8.5 billion.

Excluding the cost of stock-based compensation and other items, Cisco's earnings were 31 cents per share. Analysts polled by Thomson Reuters were expecting earnings of 29 cents per share on $8.5 billion in revenue.

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2009-08-03 18:04:51