The Cisco System seems to be working again.
As tech spending gradually crawls out from under its shell, Cisco is one of the main beneficiaries. Now, we're still in a recession, and companies aren't buying a whole lot of new gear. But they're starting to spend, and Cisco is getting some of that money. The San Jose-based tech gear behemoth reported better than expected quarterly earnings wednesday afternoon, and investors liked what they heard, bidding shares of Cisco (CSCO) stock higher in extended trading.
Cisco CEO John Chambers, on the company conference call, admits that the economy is still not firing on all cylinders, and that hurts Cisco's bottom line. The company reported a 21 percent drop in revenues over the last three months, while turning a profit of 1.3 billion dollars.
Most importantly, Chambers says he's feeling reasonably good about the future, and that should cause the whole tech industry to breathe a sigh of relief. Cisco's quarterly per-share number was five cents higher than what Wall Street expected. Chambers also says he doesn't see large-scale layoffs in Cisco's future.
Still cloudy, but for the tech industry, a chance of sunshine ahead.