Internet growth drives Cisco’s “strongest quarter ever”

Sales at networking equipment provider Cisco rose 27% to $10.4 billion in its third quarter of the current year, the company revealed last night, while net income rose 67% to $2.2 billion.

Increasing volume of rich Internet traffic, such as streaming video and IP telephone calls, is driving business demand for routers and switches, the company said.

"We witnessed a return to strong, balanced growth across geographies, products and customer segments that we haven’t seen since before the global economic challenges began," CEO John Chambers told investors and analysts in a conference call, adding that the quarter was "probably the strongest" in Cisco’s history.

Chambers was measured regarding Cisco’s outlook, however, warning that the economic recovery may be temporary. “While we believe the recovery is accelerating, no one knows for sure how long it will be, how long it will last, how strong it will be or the extent of new job creation,” he added.

This was the second quarter of growth in a row for Cisco. In 2008 and 2009, the company suffered four consecutive quarters of declining sales as corporate customers cut back on communications and networking spend. During this time, the company axed around 2000 jobs.

Cisco, one of the principal benefactors of the Internet boom, has recently diversified into a mind-boggling array of technology market, from unified data centre systems to handheld video cameras, which for reporting purposes it bundles into its ‘Advanced Technologies’ category. However, routers and switchers together still earn the company twice as much as this category.


Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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