Cisco Systems, the largest maker of networking equipment, reported profit that beat analysts’ estimates after the company cut back on hiring, closed offices and cut down on travel costs.
The San Jose, Calif.-based company reported a fiscal first quarter profit of $1.8 billion, or 30 cents a share, compared with a profit of $2.2 billion, or 37 cents a share for the year-earlier period.
Excluding stock compensation and some other costs, profit was 36 cents.
Analysts had expected Cisco to report earnings of 31 cents a share, on revenue of $8.75 billion, according to a consensus survey by FactSet Research.
Revenue fell to $9.02 billion in the period ended Oct. 24. Analysts had estimated $8.74 billion.
The company is benefiting from a cost-cutting plan that Chief Executive Officer John Chambers implemented during the recession. Under the new plan; hiring was cut, offices merged or were closed down and business travel costs were cut in order to compensate for the slump in sales.
“Cisco’s strong first quarter results represent two quarters of sequentially positive revenue growth and demonstrate our ability to execute on our innovation and operational excellence priorities,” said Frank Calderoni, Cisco chief financial officer.
The company says that orders are now beginning to pick up again as both corporate customers and phone carriers deal with growing traffic on their networks.
Cisco stock rose 38 cents to $23.29 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have climbed 43 percent this year.
Cisco Systems announced a joint venture to sell a new integrated data center product with EMC and VMware on Tuesday.
The venture will sell and provide maintenance and service support for the product, which is called V-Block. It will combine EMC's storage equipment, Cisco's virtualized servers and networking equipment, and VMware's virtualization technology.