6 August 2003 Cisco Systems has tightened its grip on the networking equipment market amid signs that the economic recovery may be gaining momentum.
Cisco said yesterday that fourth-quarter net income rose 27% to $982 million, thanks to market share gains in the high-end router and switch businesses.
New orders increased by almost a tenth and exceeded shipments for only the second time in the last seven quarters. Orders for its fastest — and most expensive — routers climbed by about one quarter.
“For the first time in a long time, we are seeing a number of positive signs of economic recovery,” said Cisco CEO John Chambers. He said he had met a number of CEOs recently who were more bullish about their own company’s prospects.
But there is still a long way to go, Chambers cautioned. “While things are starting to look better, it is still fragile,” he said. Underlining the point, quarterly revenues nevertheless slipped 3% to $4.7 billion, as the legacy of two years of weak corporate spending continued to bite.
However, sales in Cisco’s first quarter are forecast to rise by between 2% and 4%, largely due to revenue from Cisco’s recent Linksys acquisition. Linksys specialised in home networking products.