UPDATE 3-Cisco quarterly results soar past estimates

* Fiscal Q2 results, Q3 outlook soar past expectations

* First year-on-year revenue growth since October 2008

* CEO says to hire 2,000-3,000 people

* Shares rise 4 pct after-hours
(Adds Q3 outlook, hiring, analyst comment, byline)

By Ritsuko Ando

NEW YORK, Feb 3 (BestGrowthStock) – Cisco Systems Inc’s (CSCO.O: )
results and outlook soared past expectations and Chief
Executive John Chambers said business has improved dramatically
in nearly all areas.

The leading maker of network equipment, whose shares rose 4
percent, expects to hire 2,000 to 3,000 people in the next
several quarters, Chambers said in another sign of his
confidence in the economic recovery.

Cisco forecast revenue growth accelerating to a range of 23
percent to 26 percent in the current quarter, against the
average Wall Street forecast for an increase of 16.5 percent
year on year.

“During the quarter we saw dramatic across-the-board
acceleration and sequential improvement in our business in
almost all areas,” Chambers said in a statement.

As the economy improved, Cisco’s customers have resumed
upgrading their networks to handle growing Web traffic,
boosting sales of the company’s routers, switches and other
equipment that support wireless and Internet use.

Chambers said results for the fiscal second quarter ended
Jan. 23 were “remarkably well-balanced” between products and
geographies, indicating a solid recovery was underway.

Cisco is one of the first major technology companies to
report results that include much of January 2010. Its
performance and outlook are an indicator for the rest of the
technology sector, especially in enterprise spending.

Revenue for the quarter rose 8 percent to $9.8 billion,
marking the first year-on-year growth that Cisco has reported
since the quarter ended October 2008. Analysts, on average, had
expected $9.4 billion, according to Thomson Reuters I/B/E/S.

Profit rose to $1.9 billion, or 32 cents a share, from $1.5
billion, or 26 cents a share, in the year-ago quarter. Earnings
excluding special items rose to 40 cents from 32 cents, beating
Wall Street’s average forecast of 35 cents.

“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,” said Erik Suppiger, analyst at Signal Hill Group.

Chambers said on a conference call that “based upon our
business momentum and prior economic recoveries, this would
indicate that the recovery from a capital spending perspective
is very strong, and moving into the second phase of reasonably
balanced, across-the-board growth.”

A year ago, Cisco had been reporting disappointing revenue
and job cuts, stoking fears of a 2001-style freeze in
technology spending. Yet, results over the past year have shown
cutbacks were not so drastic, as companies were not as
over-invested in network equipment as they were a decade ago.

While phone service providers and large corporations did
indeed trim spending in 2009, many have recently resumed
spending as the popularity of smartphones like Apple Inc (Read more about Apple stock future.)’s
(AAPL.O: ) iPhone and increasing use of online video continue
driving Internet traffic.

Cisco shares rose to $24.03 in extended trading, after
ending 0.2 percent higher at $23.07 on Nasdaq.

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(Reporting by Ritsuko Ando; Additional reporting by Sue
Zeidler and Ian Sherr; Editing by Richard Chang and Tiffany

UPDATE 3-Cisco quarterly results soar past estimates