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Cisco reported higher earnings and revenue in its fiscal second quarter, as the networking company saw sales increase across almost all of its product segments.
For the quarter ended Jan. 23, the technology industry bellwether said Wednesday profits increased more than 23% to $1.9 billion, or 32 cents a share, from $1.5 billion, or 26 cents a share, during the same period a year ago. Revenues rose 8% to $9.8 billion from $9.1 billion.
"Our outstanding Q2 results exceeded our expectations and we believe they provide a clear indication that we are entering the second phase of the economic recovery," John Chambers, chairman and chief executive of Cisco, said in a statement. "During the quarter we saw dramatic across the board acceleration and sequential improvement in our business in almost all areas."
Cisco beat Wall Street esimates of $9.4 billion in revenue, according to an analyst survey by Thomson Reuters. Cisco stock was up more than 2.8% in after hours trading following the earnings report.
The latest results represented Cisco's first sales increase in a year. Cisco executives said the company exceeded their expectations, with growth occurring across almost all geographies and product segments.
In a conference call with financial analysts, Chambers said the company planned to increase its workforce by 2,000 to 3,000 people over the coming months. Cisco last year was forced to cut jobs because of the economic downturn that hammered capital spending by businesses.
Cisco increased its total cash by $2.5 billion in the quarter to $38.6 billion in cash and equivalents. The company forecast fiscal third quarter revenue growth of between 23% and 26%. That would translate into revenue of $10.04 billion to $10.28 billion.
Cisco, the world's largest supplier of equipment for connecting to the Internet, is the latest tech bellwether to see what appears to be a return to growth in the IT industry following the economic recession that kept many businesses on the sidelines.
IBM, for example, reported last month a slight year-over-year gain in overall sales in the fourth quarter of 2009 and more robust increases in key lines like software and tech services.
Intel in reporting a 28% increase in revenue in the fourth quarter said it expected to see a "modest recovery of corporate purchases of PCs."