Local Tech Wire, AP

RESEARCH TRIANGLE PARK, N.C. – Networking giant (Nasdaq: CSCO) executed “probably the strongest quarter in our history,” with strong improvements in revenues and profits in the most recent quarter. Chairman and Chief Executive Officer John Chambers said Wednesday.

Cisco reported revenues of $10.4 billion, which topped analysts’ expectations of $10.2 billion. Cisco had forecast revenues between $10 billion and $10.3 billion. Earnings were announced just after the markets closed.

Earnings increased 40 percent and revenues climbed 27 percent from a year ago.

Excluding one-time charges and the cost of stock-based compensation, the world’s biggest maker of computer networking equipment earned 42 cents per share, the AP noted. Analysts expected 39 cents per share.

However, Cisco shares fell 55 cents, or 2.1 percent, to $26.19 in extended trading, after the release of the results.

Chambers said Cisco expects the recovery to continue at the same pace in the current quarter, with revenue up 25 percent to 28 percent from last year. That works out to a range between $10.7 billion and $10.9 billion, stretching above the average analyst estimate of $10.7 billion.

( for Chambers’ comments about European debt crisis and global growth breakdown.)

The quarterly news is good for more than Cisco since the stock is such a bellwether for the high-tech industry. The company, which is based in California, employs more than 4,000 people at its RTP campus.

Chambers said Cisco hired a net 1,000 people in the quarter, and he expects the pace of hiring to speed up. It laid off about 2,000 people last year. It has about 67,000 employees.

During the quarter, Cisco closed the $3.4 billion acquisition of Tandberg ASA, a Norwegian supplier of teleconferencing equipment, but the closing happened to late to affect results substantially.

Chambers said the company’s servers for data centers are selling well. The company entered that market last year, competing with Hewlett-Packard Co. and IBM Corp., who are partners in other fields. The customer base doubled last quarter, and the pace of sales is now at $200 million a year, the CEO said.

"Our financial results were outstanding, achieving record level revenue and earnings per share results,”  Chambers said in a statement.

“We witnessed a return to strong balanced growth across geographies, products and customer segments that we haven’t seen since before the global economic challenges began,” he added. “We emerge from this downturn gaining market share, a larger share of the total wallet spend of our customers, dramatically improved customer relations as a trusted technology and business partner, and having next-generation products in almost every product category.

“It is clear,” he declared, “that our game plan for how to handle economic downturns is hitting on all cylinders.”

Cisco closed Wednesday at $26.74, up 78 cents or 3 percent.

The San Jose, Calif., company’s revenue has now recovered to the level of late 2008, when the economic downturn started in earnest. Cisco saw a steep drop in sales after that. The sharp revenue increase is a reflection of a bounce-back in spending, rather than sustainable growth from Cisco — its long-term target remains year-over-year growth of 12 percent to 17 percent. Also, this year’s quarter was a week longer than last year’s which added 4 percent to 5 percent to revenue.

For quarterly financials,

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