Cisco Systems Inc., (NASDAQ:CSCO) the biggest maker of networking equipment, reported fiscal fourth-quarter profit and sales in line with estimates as surging Internet traffic from smartphones and tablets lift demand for the company’s products.
Profit excluding some items was 52 cents a share, while revenue rose 6 percent to $12.4 billion, the San Jose, California-based company said in a statement today. Analysts on average had projected profit of 51 cents and sales of $12.4 billion, according to data compiled by Bloomberg.
Cisco is benefiting from growing use of Web video and mobile devices that strain data networks and require the purchase of more routers, switches and servers. Investors were predicting a strong quarter from Cisco because spending by U.S. corporations and other markets have been improving, according to Jayson Noland, an analyst at Robert W. Baird & Co. in San Francisco.
“People were expecting a fiscal fourth-quarter beat,” said Noland, who has an outperform rating on the stock, the equivalent of a buy. “If there’s something wrong somewhere in Cisco, given how well things have been going, investors would expect Cisco to make up the difference somewhere else.”
Cisco fell in extended trading. The shares advanced less than 1 percent to $26.38 the close in New York, leaving them up 34 percent this year.
Net income rose 18 percent to $2.27 billion, or 42 cents a share, from $1.92 billion, or 36 cents, a year earlier.
After stumbling amid competition from Hewlett-Packard Co., Juniper Networks Inc. and China’s Huawei Technologies Co., Cisco has regained its footing with new products and increased spending by companies and some government agencies, according to Jayson Noland, an analyst at Robert W. Baird & Co. in San Francisco.
“They went through a lot — it kind of spiraled out of control there for a little bit but they have come back with a lot of strength,” said Noland, who has an outperform rating on the stock, the equivalent of a buy.