Sales and net income for the quarter ended May 1 both rose more than 20%, and the company plans to add 1,000 new hires.
Cisco Systems reported strong growth in quarterly income on Tuesday, crediting a continued rebound in IT spending by American businesses.
For its fiscal third quarter ended May 1, Cisco posted net income of $1.2 billion, or 17 cents per share, up 23% from earnings of $987 million, or 14 cents per share, in the same quarter a year ago. Revenue rose 22%, to $5.62 billion, from $4.62 billion last year.
Sales were strong across the board, said Cisco senior VP Charles Giancarlo, with double-digit growth in all of the company's advanced technology sectors, which include wireless, security, and IP telephony. Even core routing and switching markets were strong, with customers increasing the amount of Gigabit Ethernet hardware in their enterprises, he says. More than 30% of Cisco's sales of modular switch ports are now gigabit-ready.
Cisco had predicted sales growth between 1% and 3% for the quarter, but growth actually topped 4%. For the fourth quarter, the company says to expect growth of 3% to 5%.
During the quarter, Cisco completed the $36 million acquisition of Riverhead Networks Inc. and the $5 million acquisition of Twingo Systems Inc.
In a conference call discussing the results, president and CEO John 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 add 1,000 sales and engineering positions this year to take advantage of what it sees as a continued economic recovery. The company currently employs about 34,000 people.
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