Cisco exceeds earnings expectations

Showing signs of a recovery in the battered market for networking equipment, Cisco Systems reported yesterday a 2 per cent increase in revenue for its third fiscal quarter and saw its pro forma earnings per share nearly triple compared to the same quarter last year.

Net sales for the third quarter ending April 27 were $4.82 billion, compared to $4.73 billion in the third quarter of 2001, the company said in a statement released after the close of market.

Pro forma net income, excluding charges for acquisitions, payroll tax and certain one-time charges, was $838 million or 11 cents per share, compared to net income of $230 million or 3 cents per share for the third quarter 2001.

A consensus of analysts expected Cisco to post pro forma earnings of 9 cents per share on revenue of $4.87 billion, according to Thomson Financial/First Call.

Cisco's chief executive officer, John Chambers, called the quarter a "home run" in a statement accompanying Cisco's results.

In results based on GAAP (generally accepted accounting principles), the company reported net income of $729 million or 10 cents per share, compared with a net loss of $2.7 billion or 37 cents per share for the comparable quarter last year.

Looking ahead to the fourth quarter, analysts expect the company to earn 10 cents per share on revenue of $5 billion, according to Thomson Financial/First Call. Cisco didn't offer guidance for its fourth quarter results in its release.

In anticipation of Cisco's earnings, the company's stock (CSCO) gained. Shares ended up 19 cents, or 1.47 per cent, to $13.08.

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