Cisco's Fiscal 1Q Profit Jumps 29 Percent

SAN JOSE, Calif. (AP) -- Cisco Systems Inc.'s fiscal first-quarter profits jumped 29 percent as the network equipment giant reported continued strength in its traditional markets as well as emerging technologies such as Internet telephones, wireless and home networking gear.

The world's leading maker of routers and switches that move traffic over computer networks also said it expects revenues to increase as much as 14 percent in the current quarter compared with the same period in fiscal 2004.

"While there's always room for improvement, we are pleased with our execution in our key product categories, advanced technologies, geographies and other financial measurements,'' said John Chambers, Cisco's chief executive.

For the three months ended Oct. 30, the company on Tuesday reported profits of $1.4 billion, or 21 cents per share, on sales of $6 billion. Cisco earned $1.1 billion, or 15 cents per share, on sales of $5.1 billion in the same period last year.

Excluding special items, the company earned $1.5 billion, or 21 cents per share, compared with $1.2 billion, or 17 cents per share, in the same period last year.Analysts were expecting San Jose-based Cisco to earn 21 cents per share on sales of about $6.02 billion. In August, Cisco said it expected fiscal first-quarter revenues to be up 16 percent to 18 percent over last year. They rose 17 percent.

The company's growth remains strong despite cautious spending by its corporate customers, softness in the global economy and a lingering uncertainty over whether the high-tech industry's recovery has run its course.

Chambers also warned of increased competition, particularly from Asia-based rivals -- a trend that he expects to continue for at least the next decade. Cisco is well positioned, he said, because of its highly regarded global service, support and sales organization.

"We believe we are not only well positioned to compete, but also well positioned to lead in the future,'' Chambers said. "Simply put, we are trying to build a company that is not only built to last but built to lead.''

Cisco also has bet on a half dozen advanced technologies -- including Internet telephony, home networking, wireless and security -- to ensure overall growth continues.For several quarters, the strategy appears to be paying off. Revenue growth in the first quarter averaged about 30 percent from the previous year, the company said.

In Internet telephony, it's announced a number of recent wins that highlight its emerging role as a provider of Internet telephone equipment. In September, for instance, it announced Bank of America Corp. would buy 180,000 of its Internet phones.

In all, the company shipped 500,000 telephones in the first quarter.

The results were announced after the close of markets. Earlier, shares of Cisco closed at $19.75, down 22 cents in Tuesday trading on the Nasdaq Stock Market. They fell another 51 cents, or 2.6 percent, in extended trading.

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