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Cisco’s profit is increasing with 8% due to more sales

The largest manufacturer of networking equipment worldwide - Cisco Systems announced solid and increasing financial results for the 3rd quarter of 2010, but disappointed investors with a cautious forecast for the current quarter, which questioned the recovery of the technology sector. The leadership of the California-based company said the adjustment of their estimated results with the reduction of equipment orders from cable operators in the U.S. and government agencies. The communication shares fell on the technology giant with almost 13% in the hours after the regular session on the exchange Nasdaq. Since the beginning of this year the company's market capitalization has risen by 2.3 percent to 136.78 billion dollars. Cisco's net profit for the three months to 30 October, which for her are first fiscal quarter increased by 8% annually to 1.9 billion dollars, or 34 cents a share. An year ago, the positive financial result was the amount of 1,8 billion dollars, or 30 cents a share. Revenues increased for the sixth consecutive quarter, rising by 19% year on year to 10.75 billion dollars. Management, however, expects revenue to rise by 3 to 5% in the current quarter and a total of 9 to 12% during the current fiscal year. This is less than the target revenue growth of 12 to 17%, the company has set the long term.
The CEO of Cisco John Chambers said that orders from cable operators in the U.S. dropped by 25% compared to last year and by 48% compared with the previous quarter. He still reassure shareholders that the poor performance of the company is temporary. Cisco is one of the first major technology companies whose results include the month of October, making them an early indicator of how to represent other companies in the industry.