The world's third largest company, Cisco Systems, has reported second quarter profits up 49%, ahead of analysts' forecasts.

The largest global provider of networking equipment for the internet made $906m before charges, compared with $609m a year ago.

Net income was $825m, or 23 cents per share, an increase from $282m, or 8 cents per share, a year ago.

The rise has been driven by sales to telecoms firms, which have jumped by 75%. That has compensated for a fall in sales of routers and switches to big businesses, which slowed from their historical 30% growth rate.

Total sales for the period to 29 January rose 53% to $4.35bn, up from $2.85bn and better than the 41% rise expected by most analysts.

"The momentum of the internet revolution continues to accelerate across both business and government sectors on a worldwide basis," said chief executive John Chambers.

"It is becoming increasingly evident that the adoption of internet applications is key to success in the internet economy."

During the quarter, Cisco also completed its $7.15bn purchase of Cerent, a fibreoptic equipment maker, and agreed to acquire the optical-equipment unit of Pirelli of Italy for $2.15bn.

The company also set a 2-for-1 stock split, its ninth since first selling shares to the public in February 1990.

Providing the infrastructure for the internet is proving a lucrative business.

Other networking companies have already reported strong earnings for the quarter ended in December, including Canada's Nortel Networks.