Cisco Systems delivered quarterly results that slightly surpassed Wall Street’s expectations. The company reported that its net profit rose to $1.9 billion, a 56% increase from the quarter a year earlier. Cisco’s operating profit increased 15% in the quarter to $2.5 billion, or $0.47 a share, slightly exceeding the average estimate by analysts of $0.45 a share. Revenue for the quarter reached $11.7 billion, a 4% increase from the year-earlier quarter and above the Wall Street average estimate of $11.6 billion.
Cisco’s fiscal fourth quarter tracked the company’s performance for May, June, and July. JMP Securities analyst Erik Suppiger said, “The quarter looked reasonably good, as Cisco is executing well on its plan.” Cisco sharply increased its quarterly dividend payment by 75%, to $0.14 a share, up from $0.08.
Orders were strong in Asia, especially in China, but orders were falling in Europe and would probably fall further. The company saw improvement in the United State market toward the end of the quarter, but John T. Chambers, Cisco’s chief executive, cautioned that it was “way too early to call this a trend.” Last month, Cisco announced it would lay off 1,300 workers.
It has been a challenging environment for corporate technology spending. Cisco faces challenges from competing makers of networking equipment, all seeking to gain market share by cutting prices. Cisco is the world’s largest maker of computer networking equipment and holds 64% of the market in digital networking gear, like switches.
Routers and switches made by the company shuttles data around corporate data centers and across the Internet. The amount of data racing across computer networks continues to surge because of the rising use of streaming video and music services and smartphones. The shift to cloud computing will reduce demand from some of Cisco’s corporate customers, but overall demand for Cisco’s technology is expected to increase in the near future.