Cisco Reports Solid Revenue, Profit Growth In Third Quarter

Cisco Systems Inc. on Tuesday reported a solid increase in profits on a 21.7 percent jump in revenues that was due to strong sales across product lines.

The San Jose, Calif.-based, networking-equipment maker said sales for the quarter ended May 1 were $5.6 billion, compared to $4.6 billion for the same period a year ago. Compared to the previous quarter, revenue was up 4.1 percent.

Based on generally accepted accounting principles, or GAAP, net income for the quarter increased to $1.2 billion, or 17 cents a share, from $987 million, or 14 cents a share, a year ago.

"This momentum was achieved through sequential order growth across all major product categories and solid progress in our advanced technologies including security, wireless, LAN (local area network) and IP (Internet protocol) telephony," John Chambers, president and chief executive officer of Cisco, said in a statement. "Equally important has been our continuing strength in internal innovation, our ability to form successful, mutually beneficial partnerships, and our effective integration of acquisitions to accelerate growth into existing and new markets."

During the third quarter, Cisco completed the $36 million acquisition of Riverhead Networks Inc. and the $5 million acquisition of Twingo Systems Inc.Cash flows from operations were $2.4 billion for the quarter, the highest ever reported by the company. Cash flows for the same quarter a year ago was $1.3 billion.

In a conference call discussing the results, Chambers said he "continues to be more optimistic than I was going into the last quarter," claiming that Cisco customers "are becoming more optimistic, and starting to spend." Cisco said it plans to hire new employees soon, to take advantage of what it sees as a continued economic recovery.