Cisco Earns Profit In 2QCisco Earns Profit In 2Q

Cisco Systems posted better-than-expected results Wednesday for its second fiscal quarter of 2002, earning a profit of $660 million, or 9 cents a share, on revenue of $4.8 billion. It was "a very solid quarter," Cisco president and CEO John Chambers said. Analysts had expected the company to post revenue of $4.5 billion and earnings per share of 5 cents.

"Cisco is a market leader and probably is a good indicator of what's going on in the market," says Joel Conover, senior analyst at Current Analysis. The results show tentative signs of improving health in the networking industry, although the next couple of quarters will indicate whether that's a sustained trend, Conover adds.

Cisco's $4.8 billion in revenue for the quarter ended Jan. 26 was 29% less than the $6.7 billion it took in during the same period a year ago, but it was 8% more than the $4.4 billion it earned in the first quarter. Its $660 million profit was 24% less than the $874 million it posted a year ago, but up from the $268 million loss it posted three months ago.

Overall, "the market growth in the industry remained very challenging," Chambers said, leading Cisco to estimate that in its third quarter, typically the most challenging quarter for the company, revenue will be flat or increase only in the single digits. The company declined to predict how it will fare beyond that, citing poor visibility into its customers' plans that far in advance.