Cisco Systems Q2 Profit Surges; Shares Up 10% - Update

(RTTNews) - Cisco Systems Inc. (CSCO), the world's largest computer networking gear maker, Wednesday reported a 31 percent surge in second-quarter profit that also trumped Wall Street estimates. Shares of the company gained a near 10 percent in after-hours trading.

San Jose, California-based Cisco's second-quarter profit rose to $3.1 billion or $0.62 per share from $2.4 billion or $0.46 per share last year.

Adjusted earnings improved to $0.57 per share from $0.53 per share last year. On average, 33 analysts polled by Thomson Reuters expected earnings of $0.54 per share. Analysts' estimates typically exclude special items.

Cisco, which makes routers and switches, said revenues for the second quarter were $11.927 billion compared to $11.936 billion last year. Analysts had a consensus revenue estimate of $11.76 billion.

Commenting on the results, CEO Chuck Robbins said, "We delivered a strong Q2, and are managing the business extremely well in a challenging macro environment. We're managing the company on two fronts. We're focused on continued strong execution in the near term while investing in the innovation to lead our customers into the future."

Cisco is viewed as a technology-industry bellwether because it dominates the market for routers and switches. Cisco CEO Chuck Robbins, who took over the reigns of the company last summer, has aggressively pursued acquisitions to expand the company's market.

Moving ahead, the company expects third-quarter adjusted earnings of $0.54 to $0.56 per share and revenue growth of 1 to 4 percent. Analysts currently estimate earnings of $0.55 per share and revenues to decline 2 percent.

Further, Cisco also boosted its quarterly dividend by 24 percent to $0.26 per share, which will be paid on on April 27 to shareholder as of April 6. Cisco's board of directors also approved a $15 billion increase to the authorization of the stock repurchase program.

CSCO closed Wednesday's trading at $22.51, down $0.14 or 0.62%, on the Nasdaq. The stock, however, gained $2.19 or 9.73% in the after-hours trade.