Cisco shares dip despite stabilization hopes

NEW YORK, May 7 (Reuters) - Shares of Cisco Systems Inc (CSCO.O: Quote, Profile, Research) fell on Thursday despite stronger-than-expected quarterly results and comments by Chief Executive John Chambers on increasing stability, as investors sought more solid evidence of a recovery.

Cisco said on Wednesday that revenue in the quarter ended April 25 fell 17 percent year-on-year and forecast a 15 percent to 20 percent decline for the following quarter. Chambers said conditions appeared to be stabilizing.

"Cisco delivered, but now people are wondering, from here where do we go? So some people are taking profits," said Jefferies analyst Bill Choi.

Chief Financial Officer Frank Calderoni added to the caution, saying he could not yet declare a bottom for the network equipment maker.

"Although we're feeling better about what we saw and what we heard from our partners and our customers in the third quarter, we clearly are not at a point where we're saying it's a bottom," Calderoni told Reuters in an interview on Thursday.

"We're saying we see somewhat of a leveling, and we need a little bit more visibility before we start talking about some stabilization in our business."

Cisco shares, which had risen 12 percent over the past month, fell 3.5 percent to $18.92 by early afternoon, after beginning the day on a positive note.

Jefferies' Choi said, however, he was upbeat about the company's long-term prospects.