Cisco Systems’ Earnings Slip but Beat Estimates

Communications equipment maker Cisco Systems Inc. posted better-than-expected fiscal second-quarter results Tuesday as revenue rose because of network and security upgrades, sending the company’s shares up 5% in after-hours trading.

Although costs from expensing stock options helped push net income down 1.8% from a year earlier, Cisco’s earnings per share, excluding items, beat Wall Street estimates.

The San Jose-based company also projected that third-quarter revenue would grow 10% to 12% from the year-earlier quarter, in line with analysts’ expectations.

Cisco reported net income of $1.38 billion, or 22 cents a share, for the quarter ended Jan. 28, compared with $1.4 billion, or 21 cents, a year earlier.

Excluding one-time and other special items, Cisco earned 26 cents a share; analysts had expected 25 cents on average.

“It’s in line on revenues and a penny upside on earnings, which is encouraging,” said analyst Erik Suppiger of Pacific Growth Equities.

Cisco booked $188 million, or 3 cents a share, for expenses related to stock options for employees.

Sales rose 9.3% to $6.6 billion. Cisco makes most of its revenue from selling routers and switches, products for directing voice and Internet data.

The results were posted after markets closed. Cisco’s shares rose 91 cents to $19 after hours. The shares closed at $18.09, up 26 cents, in regular trading.