Cisco Systems on Tuesday reported third quarter net income of $US646 million, an increase of 33 per cent over pro forma net income of $484 million for the same period last year, slightly besting analyst expectations.
Net sales for the third quarter were $3.15 billion, a 44 per cent increase compared with $2.18 billion last year.
Per-share income for the third quarter was 38 cents per share, a 27 per cent increase over the 30 cents per share for last year's third quarter. The consensus of analysts reporting for First Call was 37 cents, revised upward just from 36 cents per share.
The third quarter earnings figures were adjusted to reflect a $419 million write-off for purchased, in-process research and development, to make a comparison to last year's earnings on a pro-forma basis.
Cisco is moving to take advantage of sales opportunities fuelled by the "Internet economy", said John Chambers, president and chief executive officer (CEO) of Cisco Systems.
"The growth of the Internet economy continues to create unprecedented opportunities for people, companies and countries on a global basis," Chambers said, pointing to growth in markets for integrated data, voice, and video products. One product that is aimed at this market, for example, is Cisco's MGX 8800 wide-area switch, which the company began to ship in volume during the third quarter, company officials said.
Cisco yesterday also announced a two-for-one stock split for all shareholders of record as of May 24, 1999. The shares are expected to be distributed on June 21. In a two-for-one stock split, shareholders get two stocks for every one they hold, with the new stocks equal to half of the old ones. This way, the total value of shares does not change, but they are easier to buy and sell since they are cheaper.
Cisco sells a broad range of networking equipment for data, voice and video communications, including products for Internet uses.
In the next quarter, the company plans to hire more than 1700 employees. Worldwide, the company now employs 18,290 people, most of which work in its San Jose offices, said Larry Carter, Cisco's chief financial officer.