Cisco Profit Rises; Third-Quarter Forecast Trails
Feb. 6 (Bloomberg) -- Cisco Systems Inc., the biggest maker of computer-networking equipment, posted a second-quarter profit that met analysts' estimates on gains in Europe and Asia. The stock fell 7.1 percent after the sales forecast for this quarter fell short of analysts' projections.
Net income climbed 7.2 percent to $2.06 billion, or 33 cents a share, from $1.92 billion, or 31 cents, a year ago, Cisco said today in a statement. Excluding costs such as stock- based compensation, profit was 38 cents, matching the average of estimates compiled by Bloomberg. Revenue rose to $9.83 billion.
Chief Executive Officer John Chambers forecast sales growth of 10 percent in the third quarter, trailing the average analyst projection of 15 percent. Companies are increasing technology spending at a slower rate as U.S. jobless claims rise and consumer spending growth wanes.
``People are going to be very intent on what's going on in their enterprise business, particularly in the U.S.,'' Greg Woodard, who helps oversee about $18 billion at Fairport, New York-based Manning & Napier, said before today's report.
Cisco dropped $1.63 to $21.45 in late trading after closing at $23.08 on the Nasdaq Stock Market. The shares have declined 15 percent in the past year.
Second-quarter revenue increased 16 percent and exceeded the average analyst projection of $9.79 billion. Sales in developing countries climbed 53 percent to $1.2 billion, while European revenue advanced 8 percent. The Asia-Pacific region posted a 19 percent gain.
Customers in the U.S. and Europe are ``cautious,'' Chambers said.
U.S. gross domestic product increased at an annual rate of 0.6 percent in the calendar fourth quarter, down from 4.9 percent in the third, the Commerce Department said last week.
U.S. companies' budgeted growth in technology spending may slow to 4.8 percent this year from 5.2 percent in 2007, according to Forrester Research Inc. in Cambridge, Massachusetts.
BLOOMBERG
No comments:
Post a Comment