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Cisco Profits Up, But Murky Outlook Drags Stock Down

Networking giant posts solid first quarter; prospects dimmer for next one

By Wesley Oliver,  Newser Staff

Posted Nov 7, 2007 8:51 PM CST
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(Newser) – Cisco touted a 37% increase in its first-quarter profits, but it wasn’t enough on Wall Street to overcome a pessimistic outlook for the company's current quarter. The network equipment maker said its revenue-growth forecast of $9.79 billion will fall just short of the $9.81 billion most analysts expected. The news depressed the stock by 9% in after-hours trading, MarketWatch reports.

“Looks pretty solid,” said one analyst, who added that “investors were expecting more.”  Cisco did have good news: During its fiscal first quarter, which ended Oct. 27, it boosted revenue by 17%, Reuters reports, partly on the strength of new products. But another analyst warns the company will need to “work hard to maintain growth” to fend off rival Juniper Networks.

Cisco Systems Inc. chairman and Chief Executive Officer John Chambers speaks during a demonstration of Cisco's TelePresence Web 2.0 technology in Bangalore, India, Wednesday, Oct. 31, 2007. (AP Photo/Aijaz Rahi)
Cisco Systems Inc. chairman and Chief Executive Officer John Chambers speaks during a demonstration of Cisco's TelePresence Web 2.0 technology in Bangalore, India, Wednesday, Oct. 31, 2007. (AP Photo/Aijaz...   (Associated Press)
Cisco Systems Inc. chairman and Chief Executive Officer John Chambers looks on during a demonstration of Cisco's TelePresence Web 2.0 technology in Bangalore, India, Wednesday, Oct. 31, 2007. (AP Photo/Aijaz Rahi)
Cisco Systems Inc. chairman and Chief Executive Officer John Chambers looks on during a demonstration of Cisco's TelePresence Web 2.0 technology in Bangalore, India, Wednesday, Oct. 31, 2007. (AP Photo/Aijaz...   (Associated Press)
A sign in the lobby of Cisco headquarters in San Jose, Calif. is seen Monday, Nov. 5, 2007. (AP Photo/Paul Sakuma)
A sign in the lobby of Cisco headquarters in San Jose, Calif. is seen Monday, Nov. 5, 2007. (AP Photo/Paul Sakuma)   (Associated Press)
Cisco Systems CEO John Chambers smiles during a keynote address in San Francisco, in this Oct. 24, 2006, file photo. (AP Photo/Paul Sakuma, file)
Cisco Systems CEO John Chambers smiles during a keynote address in San Francisco, in this Oct. 24, 2006, file photo. (AP Photo/Paul Sakuma, file)   (Associated Press)
U.S. network equipment maker Cisco Systems Inc. Chairman and CEO John Chambers laughs during a meeting with the heads and senior officials of different software companies in Bangalore, India, in this Dec. 7, 2006 file photo. (AP Photo/Aijaz Rahi, file)
U.S. network equipment maker Cisco Systems Inc. Chairman and CEO John Chambers laughs during a meeting with the heads and senior officials of different software companies in Bangalore, India, in this...   (Associated Press)
  (Getty Images)
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