Cisco Systems beat analysts’ estimates for fiscal third-quarter profit, a sign of stability as Chief Executive Officer John Chambers prepares to hand the reins to Chuck Robbins.
Chambers had reiterated Cisco’s quarterly forecast on May 4, when the world’s largest maker of networking equipment announced that Robbins would become CEO on July 26. Chambers will remain as executive chairman.
“This tells the market that this company doesn’t have structural issues,” said Pierre Ferragu, an analyst at Sanford C. Bernstein & Co. “The company is in a very good position to deliver under new leadership.”
Sales increased 5.1 percent to $12.1 billion, with profit before certain costs of 54 cents a share, for the quarter ended April 25, the company said Wednesday in a statement. Analysts projected sales of $12.07 billion and profit of 53 cents a share, according to the average of estimates compiled by Bloomberg.
Cisco employs more than 4,000 workers and 1,400 contractors at its Research Triangle Park campus.
The company dominates the business for routers and switches, and is the fastest growing company in the $50 billion market for servers, with a 30 percent increase in 2014 sales compared with 2.3 percent for the total market, according to researcher International Data Corp.
Cisco has been introducing products, including more software, for the Internet of Things, to help companies and governments make better of use of information gathered from manufacturing equipment and other devices.
Robbins, a 17-year Cisco veteran who most recently ran the San Jose, Calif.-based company’s global sales effort, said May 4 that he planned to stick with the current strategy, but would “accelerate” efforts in certain markets, such as security. He also said he planned to impose greater “operational rigor.”
Cisco shares were little changed in extended trading after closing Wednesday at $29.35, up 12 cents. The shares have gained 5.5 percent since the start of the year.