Cisco Earnings Climb; CEO Remarks Push Shares Lower
SAN JOSE (AP) – Cisco Systems Inc. said Wednesday that its earnings for the latest quarter climbed 8 percent from last year, providing fresh evidence that business spending on technology continues to recover from the recession. But new downbeat comments from the company’s CEO on the pace of its customers’ spending helped push shares lower in extended trading.
The stock dropped 95 cents, or 3.9 percent, after the results came out.
Chief Executive John Chambers said, “We have seen capital spending moderate in some areas of our business” in a statement after the market close.
That’s after Chambers rattled investors back in August by pointing to “unusual uncertainty” among customers about the economy.
As the world’s biggest supplier of network equipment, Cisco offers a fair reading on the pace of corporate investment.
The company said Wednesday it earned $1.9 billion, or 34 cents per share, in the fiscal first quarter ended Oct. 30. That’s up from $1.8 billion, or 30 cents per share, a year ago.
Stripping out unusual items, it would have earned 42 cents per share. Analysts expected 40 cents.
Revenue rose 19 percent to $10.75 billion, just above the average forecast of $10.74 billion.
But that was still below the $10.95 billion that analysts had predicted for the quarter in August, before the company lowered expectations.
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