SAN FRANCISCO -- Cisco Systems is forecasting revenue growth for the first time in a year, offering further evidence that orders are rising again after passing what CEO John Chambers called a "tipping point" in the downturn this summer.
The world's No. 1 maker of computer-networking gear said Wednesday that given the brightening conditions, it will start to hire after laying off workers over the past year. Cisco's work force has shrunk by about 3,500 over the past four quarters to about 63,800, mostly from layoffs but also from early retirement offers and attrition.
Cisco's hiring plans, however, are not necessarily good news for the 4,500 employees and contractors who work on its Research Triangle Park campus. Chambers said during a conference call with analysts that the hiring will be "very targeted" and focused on new markets.
Cisco's results are seen as a gauge of how large corporations and government agencies and Internet providers are managing their technology budgets.
The company's aggressive expansion into markets outside its core routing and switching businesses poses one threat to Cisco in the form of lower profit margins.
Cisco is entering the computer-server market, where it will compete with longtime partners Hewlett-Packard and IBM. It is also expanding its product line to include consumer gadgets.
This year, Cisco bought Pure Digital, which makes the popular Flip Video camera. As one of the richest technology companies, Cisco has been on an acquisition binge, announcing several big acquisitions last month, including the $3 billion deal for Norway's Tandberg ASA, which makes videoconferencing equipment, and a $2.9 billion deal for Starent Networks, a maker of equipment for wireless carriers.
Cisco's forecast is for revenue growth of 1 percent to 4 percent in the current quarter, which ends in January. That would translate to revenue of $9.2 billion to $9.5 billion.
Cisco reported Wednesday after the market closed that its net income dropped 19 percent to $1.8 billion, or 30 cents per share. Revenue fell 13 percent to $9 billion.
Wall Street was expecting even steeper declines, though. Excluding one-time charges, Cisco earned 36 cents per share, ahead of estimates for 31 cents per share in net income, on that same basis.
Cisco's shares climbed 82 cents, or 3.5 percent, to $24.11 in extended trading. In regular trading earlier, it gained 31 cents, or 1.4 percent, to close at $23.22.
"Building off what we saw as a clear tipping point in Q4, our Q1 results continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times," Chambers said in a statement.
Cisco's fiscal fourth quarter ended July 25.
Cisco, based in San Jose, Calif., also announced that its board has approved $10 billion more for stock buybacks, lifting the total amount available to $13.1 billion.
