Cisco results signal economic recovery


Cisco results signal economic recovery

Warwick Ashford

Cisco Systems has reported a return to revenue growth after declines in the past four quarters.

The network equipment maker and industry bellwether beat market expectations with an 8% year-on-year rise in sales to $9.8bn in the past three months, with the biggest growth in the US and Asia-Pacific.

The company reported profits of $2.3bn, or 40 cents a share, compared with average analyst predictions of $9.4bn in revenues and profits of 35 cents a share, according to the Financial Times.

"The results provide a clear indication that we are entering the second phase of the economic recovery," said John Chambers, chief executive at Cisco.

The market hit bottom in the April quarter of 2009, but by the July quarter had reached a tipping point and the start of an upturn in capital spending, he said.

Chambers said Cisco, which recently bought video conferencing company Tandberg for $3bn and wireless equipment maker Starent for $2.9bn, will continue to expand its business aggressively.

Cisco's workforce will grow by 2,000 to 3,000 in the next few quarters, he said.

The results pushed Cisco shares up 3% to $23.76 in extended trading in New York.

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