Cisco beats forecasts, points to recovery

By Ritsuko Ando

NEW YORK (Reuters) - Cisco Systems Inc posted stronger-than-expected quarterly revenue and profit as businesses began investing again in network equipment after cutting back on spending for the past year.

Chief Executive John Chambers said in a statement that the economic outlook was improving. Shares of Cisco, which have climbed more than 40 percent since the start of the year, rose 3 percent in after-hours trading on Wednesday.

"It's fair to say things are strengthening, but I don't know if any CEO is sticking their neck out and talking about a strong 2010 yet," said Bill Choi, analyst at Jefferies & Co.

"And I'm not sure if even Cisco with its broad base is able to give that color just yet -- you might have to wait another quarter as we get more color on these companies' spending plans."

Cisco also said its board of directors authorized up to $10 billion in additional share repurchases, bringing Cisco's total outstanding repurchasing program to around $13.1 billion.

For the quarter ended Oct. 24, revenue fell 13 percent from a year earlier to $9.0 billion. But that was up 6 percent quarter-on-quarter, and higher than the average Wall Street forecast of $8.7 billion, according to Thomson Reuters I/B/E/S.

Net profit was $1.8 billion, or 30 cents a share, compared with $2.2 billion, or 37 cents a share, a year earlier. Excluding items, profit was 36 cents a share compared to 42 cents a share a year earlier, and higher than the average Wall Street forecast of 31 cents.

Cisco is the world's top vendor of routers, switches and other network equipment used by global businesses, including phone companies as well as governments.