Instant view: Cisco returns to growth, revenue beats Street

LOS ANGELES (BestGrowthStock) – Cisco Systems Inc reported higher-than-expected revenue growth as more customers resumed upgrading their networks to handle increasing wireless and Internet traffic.

COMMENTARY:

JIM AWAD, MANAGING DIRECTOR, ZEPHYR MANAGEMENT

The results “look like they were better than expected in terms of both earnings and revenue, and the CEO seemed to be giving a bullish statement on the economy, said we’re in the second stage of an economic recovery.

“All of the analysis I’m seeing would say the stock would go up. Everything you see on the surface, the markets would like.”

MARK MCKECHNIE, ANALYST, BROADPOINT AMTECH

“It looks like they beat across the board, both their high end of guidance, but also some of the more aggressive whispers.

“The press release seems pretty positive. John Chambers is saying they’re entering the second phase of the economic recovery, and that they saw acceleration and sequential improvement in all areas.

“We’re definitely seeing component tightness. A lot of people were worried about, would Cisco be able to hit the high end of their numbers, given that the food chain seems like there’s some shortages across the board. Clearly they were able to execute and beat that high end of guidance.

“It will be interesting to find out on the call if they left some demand on the table because they couldn’t ship enough.

“Right now, it’s encouraging to see more demand than people can build. It’s a result of people being surprised at the trajectory of the recovery.”

WILLIAM KREHER, ANALYST, EDWARD JONES

“We’re very pleased with the results. We think the strong year-over-year revenue growth indicates that Cisco is well positioned as we continue to emerge from the downturn.

“I’d say that Cisco’s investments during the downturn are going to pay off very nicely given their geographic reach, and the results today show the beginning of that effect.”

ERIK SUPPIGER, ANALYST, SIGNAL HILL GROUP:

“I am certainly very encouraged. The results were very strong, better than we were looking for, and an incremental improvement from the last quarter when they noted their visibility into the second half of the fiscal year was limited and they didn’t want to suggest a recovery was under way.

“Clearly this suggests they feel better about their visibility and the economic environment.

“It’s fair to see they couldn’t have generated this upside without a recovery in their core business: switching and routing.”

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(Reporting by Sue Zeidler and Ian Sherr)

Instant view: Cisco returns to growth, revenue beats Street