Cisco Systems surprised investors last night with a stronger-than-expected outlook and quarterly profit as demand for network equipment to handle Web traffic showed no signs of weakening, driving its shares up 5 per cent.
The announcement defied some analysts' predictions that the biggest maker of routers and switches to direct Internet traffic might fail to surprise this quarter, after the previous two quarterly results triggered heavy buying in the shares.
Chief executive John Chambers forecast revenue in the fiscal third quarter to grow 19 per cent to 20 per cent.
Net income for the fiscal second quarter ended January 27th rose to $1.9 billion, or 31 cents per share, from $1.4 billion, or 22 cents per share, in the same quarter a year earlier.
Earnings excluding stock-based compensation charges, amortization of intangibles and a tax credit was 33 cents per share.
"They were really good numbers for the quarter in EPS and revenue, as well as guidance. It was strong performance across the board," said Sanford Bernstein analyst Jeff Evenson.
The California-based company has also been expanding into video, as seen in last year's acquisition of cable set-top box maker Scientific-Atlanta.