The company Cisco, the world’s largest manufacturer of computer networking, announced that the company in the fiscal third quarter a profit above expectations as well as corporate clients increased their investment in the creation of computer networks and data centers under the modernization of cloud services.
Operating revenues amounted to 51 cents per share, while Cisco revenue increased by 5.4% to 12.22 billion dollars. Analysts were expecting earnings of companies in the 49 cents a share on revenue of 12.17 billion dollars.
According to analysts, Cisco now receives financial growth due to increased demand for new high-performance equipment for the transmission of large amounts of network traffic and transmission of video over the Internet. In addition, the company has spent the last quarter of decline in prices of some models of their devices, which is allowed to raise their sales. Another item that made it possible to increase the income of the company, was the integration of a previously purchased the business assets.
In the current quarter, which expires in July, the company expects operating profit of 50-52 cents a share, which is within the framework of the market forecast. Sales are expected to increase by 4.7% from last year’s level and amount to 12.2-12.5 billion.
After the publication of positive quarterly report, the paper company rose by 9.4% to 23.20 dollars.
In the third quarter, which ended on April 27 Cisco accounting, net income rose 14% to 2.48 billion dollars, or 46 cents a share, from 2.17 billion dollars, or 40 cents a share, a year earlier.
CEO of Cisco John Chambers said that a significant contribution to the growth of the company’s sales have made U.S. corporate sales, but at the same time, he noted that the demand for the development of the company is still low in the markets of Southern Europe and China, which hampers the overall dynamics of sales. In the reporting quarter, sales of Cisco in the U.S. market grew by 7% in Asia – by 1%, and in the EMEA region have not changed from last year.
Gross margins for Cisco Systems as a whole was 63%, versus Wall Street expectations of 61%.