Network equipment maker Cisco Systems Inc. (NASDAQ.CSCO) reported a solid fourth quarter performance, Wednesday, saying its net profit jumped nearly 73 percent on the back of a strong revival in corporate IT spending.
Cisco said, Wednesday, its net profit surged 72.7 percent to $1.9 billion or $0.33 per share in the fiscal fourth quarter ended July 31, from $1.1 billion or $0.19 per share in the year ago period.
Excluding special items, Cisco said it earned net profit of $0.43 per share.
Revenue also jumped 27 percent to $10.8 billion, in line with its own forecast range of $10.7 billion and $10.9 billion, but marginally lower than analysts' average forecast.
Analysts, on average, had expected the tech major to report earnings of $0.42 per share on revenue of $10.88 billion.
For the full-year, Cisco said its net profit was $7.8 billion or $1.33 per share, up 27.9 percent from $6.1 billion or $1.05 per share in fiscal 2009. Net sales were also up 10.8 percent from $36.1 billion to $40 billion.
The company said product segment sales surged 31 percent while service segment sales rose 12 percent.
Overall, orders were up 23 percent year-on-year, Cisco said, though market in Japan was flat. Emerging markets and Europe witnessed strongest demand with orders up 35 percent and "mid-twenties," the company said in a conference call.
In Asia-Pacific and North America, orders were also up about 20 percent.
Revival in corporate IT spending helped its net profit and revenue bounce back from last year's recession levels, Cisco said.
"This was yet another very strong quarter with a number of record financial results for Cisco, closing the fiscal year in a tremendous position of strength - a compelling financial model, a well-tuned innovation engine and solid execution on our growth strategy," Cisco CEO John Chambers said.
The company's shares, however, slipped in after-hours as investors were expecting Cisco to post an even stronger result especially after it reported stellar results in the past couple of quarters.
San Jose, California-based Cisco's shares closed down 2.39 percent at $23.73 on the Nasdaq and was down 8.34 percent at $21.75 during after-hours trade.
Cisco is seen as a bellwether for corporate IT spending and it has used its dominant position in the IT networking gear market well, besides expanding into other market segments such as data-space.
However, on Wednesday, Cisco said its gross margin slipped from 64 percent to 62.7 percent, indicating that though market recovery is underway, it still has a long way to go.
To contact the editor, e-mail: