Cisco's earnings beat estimates
Internet networking company, citing strong performance across the board, reports higher-than-expected earnings and revenue but investors are not impressed.
NEW YORK (CNNMoney.com) -- Computer networking company Cisco Systems Inc., citing strong sales of its routers, set-top boxes and other products, reported higher-than-expected earnings on Wednesday.
Cisco said its latest quarterly net income was $2.2 billion, or 35 cents a share, an increase of 37 percent from a year ago. Excluding certain charges, the company reported a profit of 40 cents a share; analysts were expecting Cisco to report 36 cents per share on that basis.
In a conference call to analysts, Cisco Chief Executive John Chambers offered guidance of 16 percent revenue growth for the next quarter - in line with Wall Street's estimates.
Shares of San Jose, Calif.-based Cisco was trading about 4 percent lower after hours.
Shaw Wu, an analyst at American Technology Research, thinks that the stock is down because investors were looking for stronger results.
Earnings per share beat consensus expectations by one penny but that was expected, according to Wu. "The results were solid but investors were looking for more," he said.
Another analyst, Timothy Daubenspeck of Pacific Crest Securities, said that investors were looking for as much as $100 million more over the $2.2 billion net income the company reported.
Chambers said he expects overall economic conditions to cool Cisco's U.S. enterprise division, which sells to businesses. For example, Cisco saw a dramatic decrease in orders to its financial services customers, he said, and similar softness in orders from the automotive sector.
Chambers remarks were surprising, according to Wu, since the company had not previously acknowledged the impact of the broader economic turmoil on Cisco's performance.