Cisco's Ray Of Hope - InformationWeek

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11/7/2003
02:54 PM
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Cisco's Ray Of Hope

Cisco Systems last week released first-quarter earnings that indicate surprisingly strong growth in the network equipment vendor's core businesses as well as a potentially burgeoning economic recovery.

"We're starting to see the first glimmers of an overall improvement in the economy," says Charlie Giancarlo, senior VP and general manager of switching, voice, and carrier systems. Cisco's revenue growth "didn't just come from one segment of the business, it was fairly broad based."


John Chambers

John Chambers
For the quarter ended Oct. 25, Cisco posted a net profit of $1.1 billion, or 15 cents per share, up from $618 million, or 8 cents per share, in the same quarter a year ago. Revenue in the quarter reached $5.1 billion, up from $4.8 billion a year ago. It's the first quarter in a long time that Cisco's sales have passed the $5 billion mark. "We've been waiting for about 2-1/2 years to do this," Giancarlo says. Sales of routers and switches were particularly robust, with very strong growth in sales to service providers, he adds.

In a conference call, CEO John Chambers said the company expects revenue to continue to rise in the second quarter, coming in around $5.2 billion. Though cautiously upbeat, Chambers did indicate that the business executives he speaks to feel increasingly optimistic.

Cisco is enough of a bellwether that its increased revenue may reflect an improving national economy. Says Meta Group analyst David Willis, "There's finally a sign of hope."

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