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Cisco stock options crimps Q3 earnings

Less than bullish for Q4

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Cisco chief executive John Chambers said the networking giant had beaten expectations for the third quarter, ending 29 April 2006, but it isn't increasing estimates for the current quarter.

The firm sold $7.3bn worth of kit in the the quarter and made a profit of $1.4bn - including the costs of staff share options. This was about the same as profits same time last year, when options were not expensed. Revenue grew 12 per cent year-on-year excluding the impact of the $6.9bn purchase of Scientific-Atlanta. Chambers is bulllish about the progress made in integrating the firm.

He said it was a strong quarter, especially in the US. Sales in Europe were slightly weaker and Japan showed "signs of flattening". Sales in US and Canada account 52 per cent of Cisco's business.

Emerging markets, Eastern Europe, Latin America, Middle East and Africa, and Russia make up only 10 per cent of Cisco's total business, but grew at 30 per cent compared with the year before.

Chambers said: "Our success in the emerging markets is exceeding even our own optimistic expectations."

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