SAN JOSE — Cisco Systems Inc. reported higher-than-expected profits and sales Wednesday for its fiscal second quarter, suggesting the networking giant may be slowly recovering from the economic downturn.
For the three months ended Jan. 26, Cisco earned $660 million, or 9 cents a share, down 24 percent from earnings of $874 million, or 12 cents a share, in the same period a year ago.
Sales were $4.8 billion, down 28 percent from $6.7 billion in the second quarter last year.
Excluding special items, the company earned $664 million, or 9 cents a share, compared with profits of $1.3 billion, or 18 cents a share, a year ago. It was the second quarter-to-quarter increase in profits and revenues.
Analysts were expecting profits of 5 cents a share on revenue of $4.5 billion, according to a survey by Thomson Financial/First Call.
“This was a very solid quarter,” said John Chambers, Cisco’s chief executive.
The company typically faces a slower third quarter, and executives predict revenue to be flat or increase in the low single-digit range.
Analysts are expecting third-quarter sales of $4.6 billion, a 2 percent increase.
Cisco makes routers, switches and other devices that direct traffic over networks. It was hard hit by the tech downturn and cutbacks in spending by telecommunications carriers and dot-coms.
The company, which once boasted of hiring 1,000 employees a month, laid off 8,500 a year ago.
“In our last conference call, we said our business had reached a plateau with a slight upward bias,” Chambers said. “Our financial results this quarter establish a second, slightly higher plateau.”
Cisco jumped the gun on much of its second-quarter surprise, however. Late Tuesday, an executive inadvertently released a memo indicating its results surpassed analysts’ expectations. The company then issued a news release early Wednesday, but did not release specifics.
Shares of Cisco closed 11 cents higher to $18.61 in Wednesday trading on the Nasdaq Stock Market before the official earnings release. In after-hours trading, shares lost $1.37.
For the first six months of fiscal 2002, Cisco reported profits of $392 million on sales of $9.3 billion, compared with earnings of $1.7 billion on revenues of $13.3 billion for the same period a year ago.
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