Cisco Q3 profits leap 35 per cent
Cashes in on bandwidth demands
Cisco's fiscal third-quarter profit jumped 34 per cent on the back of increased demand for high bandwidth equipment from telephone and cable television companies.
The networking equipment maker earned $1.9bn net income in the quarter ending April 28, compared with $1.4bn a year earlier.
Revenue also saw a boost of 21 per cent. Cisco rang up $8.9bn in sales during the quarter, up from $7.3bn in Q3 2006.
Scientific-Atlanta, acquired by Cisco in 2006 for $6.9bn, contributed net sales of $752m during the third quarter. Scientific-Atlanta produces high-speed internet equipment for cable operators. Its sales rose 30 per cent per cent year over year.
"In our view, we are in the midst of a unique market transition, where all of the action is going to the network and our vision for the network as a platform for all forms of communications and IT has become a reality," Cisco CEO John Chambers said in a statement.
The company expects demand for high speed networking will increase as internet and TV services compete over the market — leaving Cisco to rake in the money they throw at each other.
Chambers said the company's success is based on its ability to foresee such market transitions and deliver the right products to take advantage of the opportunity.
Cisco's next major buy is the $3.2bn acquisition of online conferencing company WebEx. The deal was announced this March. ®