Cisco's sales spring forward

Cisco Systems blew past its own forecast for the latest quarter, reporting its first sales increase in a year as it left the recession behind.

Improvement was dramatic "across the board" and provides "a clear indication that we are entering the second phase of the economic recovery," CEO John Chambers said in a statement Wednesday.

The company also provided an outlook for the current quarter that was far above analyst expectations.

Because Cisco is the world's largest maker of computer networking equipment, its sales are seen as a bellwether of technology spending by large corporations, government agencies and telecommunications service providers around the world. The fortunes of the San Jose, Calif.-based company also are key to the Triangle, where Cisco employs about 4,300 employees and contractors.

Excluding one-time charges, Cisco earned 40cents per share. Analysts polled by Thomson Reuters expected 35cents per share.

Revenue grew 8percent to $9.8billion.

For the current quarter, which ends in April, Chambers said,Cisco expects a sales increase of 23percent to 26percent from the same quarter last year. That works out to $10billion to $10.3billion. Analysts were expecting $9.5billion.

Investors cheered the outlook. Shares of Cisco rose 83cents to $23.90 in extended trading after Chambers announced the forecast on a conference call. Before the release of results, shares closed up 5cents at $23.07.

Cisco's high profit margin and huge cash hoard let it power through the recession in relative serenity, though it did lay off about 2,000 employees, including some at its Research Triangle Park campus. Cisco even made a string of multibillion-dollar acquisitions.

"We are confident that our aggressive strategy of investing in the business during the downturn ... [is] driving our momentum and growth in the market," Chambers said.

He now expects the company to hire a net 2,000 to 3,000 people over the next few quarters.