Cisco's fiscal Q2 earnings climb 44%

Feb 13, 2013, 4:38 PM EST

SAN FRANCISCO (AP) — Cisco's latest quarterly report is providing further evidence that spending on technology gear is picking up despite persisting concerns about a still-shaky economy.

The earnings announced Wednesday exceeded analyst projections for the world's largest maker of computer networking equipment.

Cisco Systems Inc.'s quarterly performances and forecasts are widely regarded as a way to assess the state of the technology industry.

That's because the San Jose, Calif., company cuts a broad swath while selling its routers, switches, software and services to corporate customers and government agencies around the world.

Cisco earned $3.1 billion, or 59 cents per share, during a three-month span ending Jan. 26. That represented a 44 percent increase from $2.2 billion, or 40 cents per share, in the previous year.

The results for Cisco's fiscal second quarter received a big boost from tax benefits and credits totaling $926 million, or 17 cents per share. Even without those one-time gains, the company earnings still would have been slightly better than the previous year.

Excluding the tax lift and certain accounting charges, Cisco said it earned 50 cents per share. That was 2 cents per share above the average estimate of analyst surveyed by FactSet.

Revenue edged up 5 percent to $12.1 billion, in line with analyst forecasts.

Although he described the economy as "challenging" in a prepared statement, Cisco CEO John Chambers said the company's product mix remains in strong demand.

Chambers is expected to elaborate on his view of the economy during the company's Wednesday conference call. Cisco typically also shares its outlook for the current quarter on the call.

Investors appeared to be expecting a better performance in the latest quarter. Cisco's stock dipped 24 cents to $20.90 in extended trading.