Cisco tops estimates; shares rally

NEW YORK (CNNMoney.com) -- Cisco Systems reported another quarter of strong results Wednesday and issued a bullish sales outlook for the current period.

Cisco shares, which are at a 52-week high, surged 8 percent in extended trading on the results, which were reported after the market close.

Cisco shares have soared in the last three months and are trading at a 52-week high.

The biggest maker of computer networking and Internet gear said net income soared 28 percent from the year-ago period to $1.6 billion in the first quarter, or 26 cents on a per share basis.

Earnings, excluding certain items, rose to 31 cents a share. Analysts surveyed by Thomson First Call had been expecting earnings of 29 cents a share for the fiscal first quarter ended Oct. 28.

"It was better than expected and guidance was strong," said Paras Bhargava, an analyst at BMO Capital Markets."Everything seems to be suggesting they'll be able to keep up the momentum for the full year and maybe even longer."

Revenue climbed 25 percent to $8.2 billion during the quarter, exceeding consensus estimates for revenue of $7.9 billion.

Cisco said revenue from Scientific Atlanta contributed $584 million in sales during the quarter. Cisco bought the cable set-top box maker earlier this year as part of its push into home networking.

Looking ahead, San Jose, Calif.-based Cisco said it expects revenue to grow 24 to 25 percent in the current period, exceeding analysts' forecast for sales to climb 21 percent to $8 billion during the period.

It was strong quarter across product lines and geographic regions, and orders remains strong, CEO John Chambers said during a conference call with analysts.

Routers and switches, the bread and butter of Cisco's business, remained solid. Sales from routers rose 13 percent from the same period last year, while revenue from switches climbed 15 percent.

The upbeat earnings come a day after smaller rival Nortel Networks (Charts) warned about profit challenges, sparking a steep decline in its stock.

Cisco (Charts) shares have surged about 44 percent since August, when the company reported strong results and issued a promising forecast for fiscal 2007, saying it expects revenue to grow 15 to 20 percent for the year.

Fellow communications equipment makers Avaya (Charts) and Juniper Networks (Charts) have also gained over the same period.

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