Cisco's Chambers Looking For 1Q Revenue Growth

San Jose, Calif.-based Cisco expects revenue to grow 2 to 4 percent in the first quarter compared with the fourth quarter, in which the company reported revenue of $4.70 billion.

"Today's economy remains a 'show me' economy, meaning that CEOs wait to spend until they see their own revenues and profits pick up, but for the first time in a long time, we are seeing a number of potentially positive signs of economic recovery, business improvements and CEO confidence," Chambers said during a conference call.

Chambers tempered his hopefulness with a reminder that numerous projections for general economic recovery in the second half of 2001 and 2002 failed to materialize.

"The obvious concern here is that while things are starting to look better, it is still fragile, and may not develop to the level we all desire," he said.

For the fourth quarter, ended July 26, Cisco reported earnings of $982 million, or 14 cents per share, up 27 percent from $772 million, or 11 cents per share, the same quarter a year ago.

Revenue for the quarter dropped slightly to $4.7 million, down from $4.8 million the same quarter a year ago.

Excluding charges, Cisco earned 15 cents per share, meeting financial analysts' expectations, according to Thomson Financial/First Call.

During the quarter, Cisco saw solid sequential growth in high-end routers and switches, Chambers said. Advanced technologies grew sequentially by more than 20 percent, with IP telephony, storage and optical growing the fastest in terms of orders, he said.

"It took us three years to sell our first million IP phones and only the last fiscal year to sell our second million," Chambers said.

Also during the quarter, Cisco closed the acquisition of home networking vendor Linksys Group, which contributed $20 million in revenue to Cisco's fourth quarter results. Cisco expects Linksys to contribute $115 million in revenue to its first-quarter results.

For fiscal 2003, Cisco reported earnings of $3.58 billion, or 50 cents per share, up from $1.89 billion, or 26 cents per share, in 2002. Revenue for the year remained flat at $18.9 billion.