Networking giant Cisco is profiting from its cost cutting strategies of the last couple of years - but chief executive John Chambers has admitted he doesn't know when the market will return to growth.
For the first quarter of Cisco's financial year 2003 the company posted a profit of $618m (£389), which compared with a loss of $268m (£169) for the same period last year.
Excluding charges, Cisco posted a profit of $1bn (£629m). The company expects turnover in its second quarter, ending in January, to be down by three per cent to four per cent.
Turnover for the three-month period ending 26 October was $4.8bn (£3bn), up nine per cent from $4.4bn (£2.8bn) in the year-ago quarter.
Simon Minett, managing director at Cisco distributor Comstor, said: "In the current climate Cisco has put in good results."
Cisco's Chambers said in a statement: "By focusing on what we can control and influence, we saw dramatic year-over-year improvements in [profit] and gross margins. We are well positioned for an upturn, regardless of when it occurs."
Minett said that Cisco's results had a huge impact on the market. "The market reacted negatively to Cisco's results because it was looking for growth in the next quarter."
However, when asked about when he expected a return to growth, Chamebers said: "Most executives are very hesitant to spend unless there is a quick return, or until they see their own revenues and profit pictures improve."
But things could be on the up, according to Minett. "Europe is looking stronger than the US and we are starting to see some of the bigger deals coming through, which is a positive sign," he said.
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