Cisco Systems (CSCO) kept growing despite a challenging economy.
The world's No. 1 maker of computer networking gear sidestepped macroeconomic issues to post Q4 earnings and sales late Wednesday that beat Wall Street expectations.
Sales guidance slightly lagged views, however, with Chief Executive John Chambers pointing to a familiar culprit.
"We are modeling Europe to be very challenging over the next several quarters," Chambers said on a conference call with analysts.
Cisco has kept to a conservative game plan of late, however, and investors voted thumbs up on the report. Shares were up 5% after hours, after Cisco released results for its fiscal Q4 ended July 28. The stock rose 1.1% in the regular session, to 17.35, but is down 4% on the year.
San Jose, Calif.-based Cisco launched a restructuring program a year ago to seek to recharge growth. And while sales rose just 4% year over year, that still edged analyst views.
Cisco remains a top supplier of many of the key pieces companies need to keep data centers humming and to move into key information technology areas such as cloud computing, says Rohit Mehra, an analyst for research firm IDC.
"All of the building blocks and the foundations that are required for next-generation IT infrastructures are still very much in place at Cisco," he said. "The move toward cloud computing is driving next-generation converge infrastructures in the data center.
"That is a transition that takes as many as 10 years," he said, saying companies will press on with that transition even in a slow economy.
In the company's earnings release, Chambers said " ... Cisco is squarely at the center of major technology market transitions — cloud, mobile, visual, virtual and social."
Cisco posted Q4 revenue of $11.7 billion, up from $11.2 billion in the year-ago quarter. Per-share profit minus items rose 17.5% to 47 cents. Analysts polled by Thomson Reuters had expected $11.6 billion and 45 cents.
For the current quarter, the company expects revenue of roughly $11.5 billion to $11.7 billion, up 2% to 4% from the year-earlier quarter. It sees per-share profit minus items of 45 cents to 47 cents, up 5% to 9%. Sales exclude Cisco's NDS Group acquisition. In March, Cisco said it would buy video software maker NDS for $5 billion.
Analysts were expecting $11.62 billion and 46 cents for fiscal Q1.
The company also announced it was boosting its dividend by 75%, to 14 cents per share. "We are listening to our shareholders," Frank Calderoni, Cisco's chief financial officer, said in a statement.
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