Cisco profit falls but beats expectations

From Times Wire Services

Cisco Systems Inc.'s profit fell 5% in its fiscal third quarter but beat Wall Street's forecasts, a sign the turbulent U.S. economy didn't rattle the world's largest networking equipment maker as much as expected.

The San Jose-based company earned $1.77 billion, or 29 cents a share, during the three months that ended April 26. That represents a drop of 5.4% from the $1.87 billion, or 30 cents, that Cisco earned during the same period a year earlier.

Stripping out 9 cents a share in one-time charges for acquisition and employee stock-based compensation, Cisco earned 38 cents a share. That's 2 cents a share above the average estimate of analysts polled by Thomson Financial.

Sales were also higher than analysts' subdued forecasts, coming in at $9.79 billion in the third quarter, a 10.4% jump over the year-earlier period. Analysts were expecting sales of $9.75 billion.

Wall Street wasn't expecting fireworks from Cisco in the third quarter because the technology bellwether lowered its sales growth target in February. Cisco blamed weakness in the U.S. economy, which was causing big customers to delay or scuttle purchases involving Internet infrastructure.

Investors were hoping the company, which makes routers and switches that direct Internet traffic, would manage a slowdown in technology spending in the U.S. and at least report in line with expectations.

Cisco's higher-than-expected results sent the company's shares up 29 cents, or 1.1%, to $26.62, in after-hours trading after the results were reported. The stock had closed up 5 cents at $26.33 during the regular trading session.

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