Cisco profit beats on strong product demand

CALIFORNIA: Cisco Systems Inc reported higher-than-expected quarterly revenue and profit, helped mainly by strong demand for its security products.

The company’s shares, which had risen 27 per cent in the past 12 months to touch a more than nine-year high on Wednesday, were down 1.3 per cent at $32.40 after the bell.

Revenue in the security business, which offers firewall protection and breach detection systems, rose 14 per cent to $528 million.

Analysts on average had expected $519.1 million, according to market research firm FactSet Street Account.

Revenue in the legacy switching business, still by far its largest, fell 5 per cent to $3.31 billion in the second quarter, compared with the average estimate of $3.38 billion, according to FactSet Street Account.

The hardware business has been struggling amid stiff competition from companies such as Juniper Networks Inc and weak spending by telecom carriers and enterprises.

To offset sluggish demand for its traditional lineup of switches and routers, Cisco has been focusing on areas such as security, the Internet of things and cloud computing. Excluding items, the company earned 57 cents per share beating the average analyst estimate by a cent, according to Thomson Reuters. — Reuters