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Cisco shares up 13% on better-than-expected financial results

Cisco Systems has reported fourth fiscal quarter sales of $11.2bn, net income of $2.2bn, and earnings per share of 40 cents, beating estimates and driving the share price up 13% in after-hours trading.

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Cisco Systems has reported fourth fiscal quarter sales of $11.2bn, net income of $2.2bn, and earnings per share of 40 cents, beating estimates and driving the share price up 13% in after-hours trading.

Analysts on average had predicted earnings per share of 38 cents and sales of $11bn, according to Bloomberg.

"We've made significant progress on our comprehensive action plan to position ourselves for our next stage of growth and profitability, while delivering solid financial results in Q4," said John Chambers, chairman and chief executive officer at Cisco.

"As we start our next fiscal year, you will see a very focused, agile, lean and aggressive company that is focused on helping customers use intelligent networks to transform their businesses," he said.

Chambers has ordered massive cuts in operating expenses, which includes cutting 6,500 jobs around the world and shutting down Cisco's Flip video camera unit to concentrate on switches and routers.

The cuts are aimed at bolstering Cisco's core business and clawing back market share lost to competitors such as Hewlett-Packard and Juniper Networks.

Cisco's share of world switching revenue dropped 5.8 percentage points to 68.5%, and its share of router sales dropped 6.4 percentage points to 54.2% according to a May report from Dell'Oro Group.

The company's switching revenue was down 4% and routing down 2% in the quarter, but sales of new products and services increased 7% and 12% respectively.

Cisco also reported that orders for switches increased by 6% and routers by 17%, with 90% of Cisco's largest country markets reporting increases in orders of 10% or more.

Most of the cuts implied by the restructuring are now complete, Chambers told the Financial Times. "The big moves are largely over. We're making progress," he said.

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