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Cisco plows past second-quarter estimates

Cisco continued its remarkable string of topping analysts' profit estimates Tuesday, pocketing $906m, or 25 cents a share, on sales of $4.35bn
Written by Larry Barrett, Contributor

First Call consensus expected the world's largest network-equipment maker to earn 22 cents a share in the quarter.

Cisco shares closed up 5/8 to 125 13/16 but soared up to 133 in after-hours trading. It also announced a 2-for-1 stock, its fifth split in the past five years and ninth split since its debut in 1990.

The stock split will take effect on March 22 for shareholders of record on February 22.

The $4.35bn (£2.65bn) in sales represents a staggering 53 percent improvement from the year-ago quarter when it earned $609m, or 17 cents a share, on sales of $2.85 bn.

Most analysts were projecting sales of around $3.9bn in the quarter.

"The momentum of the Internet revolution continues to accelerate across both business and government sectors on a worldwide basis," said CEO John Chambers in a prepared release. "It is becoming increasingly evident that the adoption of Internet applications is key to success in the Internet economy."

During the quarter, Cisco completed its $7.15bn purchase of Cerent, a closely held maker of fiber-optic equipment and also agreed to acquire the optical-equipment unit of Pirelli of Italy for $2.15bn.

In a Tuesday afternoon conference call with analysts, Cisco executives reiterated their oft-stated goal of growing at or faster than industry rates. "We continue to gain share in almost all our key markets," Chambers said.

The company maintained its usual cautious optimism, although Chambers said the third quarter historically has been one of Cisco's more challenging periods of the fiscal year.

Last quarter, Cisco beat the Street, raking in $837m, or 24 cents a share, on sales of $3.88bn.

Its shares fell to a 52-week low of 45 13/16 in March before hitting a high of 125 13/16 Tuesday.

All 39 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation on the stock.

Sergio G. Non contributed to this report

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