Multimedia online boom makes Cisco’s shares rise

Revenue for the period was an 18-percent increase over last year’s figure.

SAN FRANCISCO (AP) — Cisco Systems Inc. shares jumped 7 percent after the network equipment maker reported fiscal fourth-quarter results that beat Wall Street’s expectations and boosted its financial forecast.

Cisco’s profit jumped 25 percent as it continues to see strong sales of the routers and switches that direct traffic over the Internet and other technologies tied to a boom in multimedia online content.

The company said after the market closed Tuesday that net income for the period that ended July 28 was $1.93 billion, or 31 cents per share, compared with $1.54 billion, or 25 cents per share, during the same quarter a year ago.

Excluding one-time charges, Cisco earned 36 cents per share, a penny above the estimate of analysts surveyed by Thomson Financial.

Revenue for the period was $9.43 billion, an 18-percent increase from the $7.98 billion in sales Cisco rung up a year ago. The revenue also beat Wall Street’s estimate of $9.29 billion in sales.

Shares of Cisco climbed $2.09, or 7 percent, to $31.78 Wednesday. Before the earnings were released Tuesday, Cisco’s shares rose 19 cents to close at $29.69.

Plans for 2008

On a conference call with analysts, Cisco Chief Executive John Chambers said the company is boosting its revenue forecast to 13 percent to 16 percent for 2008. For the current quarter, the company expects revenue of $9.45 billion to $9.55 billion, above the average analyst estimate of $9.39 billion.

Chambers also announced that Chief Financial Officer Dennis Powell will retire at the end of the second quarter of the current fiscal year. His replacement will be Frank Calderoni, currently a Cisco senior vice president.

Powell said in an interview with The Associated Press that he’s “never been more optimistic” about Cisco’s prospects and is leaving at a time when the company’s investments in lucrative emerging markets are beginning to pay off.

“We’re at the right time with the right products,” he said. “And the economy, from my perspective, on a global basis have never been better. And that bodes well for Cisco.”

San Jose-based Cisco is profiting from widespread network upgrades as Internet service providers and other companies boost capacity to handle increasingly bandwidth-heavy downloads, particularly video.