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Monday, 6 November, 2000, 23:07 GMT
Cisco hits the spot
Cisco Systems website
The world's second-biggest company, Cisco Systems, has published first-quarter earnings just above market expectations.


The combination of internet infrastructure and applications has created a new phenomenon, the Network Effect, and it is fueling new productivity, competition and growth

John Chambers
Cisco
The computer networking giant reported net earnings of $1.36bn, or 18 cents a share, in the three months ending 28 October, compared with $814 million, or 11 cents per share, a year earlier.

Sales rose 66% to $6.52bn, from $3.92 billion, topping Wall Street expectations of sales coming in between $6.3bn and $6.5bn.

Cisco's figures were being closely watched on Wall Street for signs of slowing.

The firm said sales to internet service providers and cable and telephone companies had boosted its results, which excluded the effects of acquisition charges and other items.

Analysts had expected Cisco to report earnings of 17 cents a share.

Green fingers

Cisco has proven a master at growing its business at a fast rate - an average of 30% to 50% annual revenue growth in the past few years - while managing Wall Street's expectations.

It has repeatedly topped analysts' consensus estimates on earnings per share by one cent.

"We are very pleased with the solid balance across our major geographies, lines of business, and product families," Cisco chief executive John Chambers said in a statement.

"Five years ago, the internet was a phenomenon that was primarily understood by techies," he said.

"Today, the combination of internet infrastructure and applications has created a new phenomenon - the 'Network Effect' - and it is fueling new productivity, competition and growth."

Taking stock

Actual net income for the first quarter of fiscal 2001 was $798m, or 11 cents per share, compared with $415m, or 6 cents per share, for the same period last year.

The figures were released after the closing bell on the stock market.

Cisco stock, which fell $1-5/8 in regular Nasdaq trading to close at $55-1/8, was trading at $55-1/2 on the Instinet in after-hours activity.

The firm's stock is down about a third from its peak of $82 in March.

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