Strong demand from Internet service providers boosted Cisco's first quarter, helping it beat Wall Street profit predictions.
The networking giant reported net income, before one-off charges, up 34 per cent to $559 million or 34 cents a share, a cent better than analysts had forecast. Revenue rose 38 per cent to $2.59 billion.
However, Cisco took a charge of $41 million for its acquisition of American Internet, which depressed the final earnings per share figure to 31 cents.
Analysts said the main contributors to the Q1 growth were increased penetration of the service provider market, both ISPs and telcos. Key success products were the Access range and the carrier class switches.
But Cisco was also helped by falling component prices, and analysts question how it will withstand a recession, given its focus on corporate and service provider customers, which may cut back capital spending as the economy slows.
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