Cisco Systems says sales surged in its second quarter as business customers increased spending on technology, but quarterly profits fell due to accounting charges.
For its second quarter, which ended Jan. 24, Cisco on Tuesday reported a net profit of $724 million, or 10 cents per share, down from $991 million, or 14 cents per share, in the same period last year. This year's earnings were lower due to a one-time charge of $567 million related to an acquisition, according to the company.
However, sales were up to $5.4 billion from $4.7 billion a year ago. In a conference call, Cisco CEO John Chambers expressed optimism about the improving economy, but said customers have been slow to respond to positive indicators. "I believe for the first time in a very long time that the external elements are continuing to be positive," he said. "But this continues to be balanced by an unusual caution." Chambers forecast that sales would continue to rise, growing as much as 3% for the current quarter.
"I think we're just starting to see the first positive signs of recovery," says Charlie Giancarlo, senior VP and general manager of switching, voice and carrier systems at Cisco. "But we're still waiting to see where the economy's going."