Cisco Systems Inc. said earnings fell 46% in its latest quarter, but the profit beat Wall Street expectations, and the company said the quarter may have been the bottom of the recession-related downturn.
"We saw a number of positive signs this quarter in the economy and in our business," Chief Executive John Chambers said in a statement. He added that if order trends keep improving, there's a good chance the latest quarter was a "tipping point."
He said he expects a slight increase in revenue in the current quarter compared with the just-ended one.
As the world's largest maker of computer networking gear, Cisco has seen sales hit hard as clients delayed investments and capital improvements. However, good profit margins and a large pile of cash have helped the company ride out the downturn.
The San Jose company posted a profit of $1.1 billion, or 19 cents a share, for its fiscal fourth quarter, which ended July 25.
That was down from $2 billion, or 33 cents, for the same quarter last year.
Sales fell 18% year-over-year to $8.5 billion, but rose 4.6% from the previous quarter. Chambers said month-to-month sales changes were starting to return to normal seasonal patterns, leaving behind the precipitous slide that started in October.
Excluding the cost of stock-based compensation and other items, Cisco's earnings were 31 cents a share. Analysts polled by Thomson Reuters were expecting 29 cents on $8.5 billion in revenue.
For the current quarter, Chambers said he expects a revenue drop of 15% to 17% from a year ago, or an increase of 1% to 3% from last quarter. That implies revenue of $8.55 billion to $8.76 billion. Analysts had been forecasting $8.59 billion.
In regular trading before the results were announced, Cisco shares closed down 29 cents, or 1.3%, at $22.15.
After hours, shares initially rose on the results, then fell as much as 72 cents, or 3.3%, to $21.43.