Strong Switching, Router Sales Help Cisco Beat Estimates

Network equipment maker Cisco Systems Inc reported higher-than-expected quarterly revenue and profit, highlighting a strong recovery in demand for its switching equipment and routers.

Cisco's shares rose nearly 3 percent in extended trading on Wednesday.

The company's key server business has grappled with competition from so-called software-defined networks (SDNs), which offer software that can run on cheap hardware.

But Cisco's new Nexus 9000 switches, which can adapt to workloads brought on by cloud computing and big data, is helping the company win back customers.

Cisco is also investing in new products such as data analytics software and cloud-management tools.

Revenue from services, which includes software and cloud offerings, rose 3.8 percent to $2.93 billion in the fourth quarter ended July 25. Product revenue, which includes routers and switches, rose 4 percent to $9.91 billion.

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On an adjusted basis, the company earned 59 cents per share.

Cisco's net income rose to $2.32 billion, or 45 cents per share, in the quarter from $2.25 billion, or 43 cents per share, a year earlier.

Revenue rose nearly 4 percent $12.84 billion.

Analysts on average were expecting a profit of 56 cents per share on revenue of $12.65 billion, according to Thomson Reuters I/B/E/S.

Cisco's shares closed at $27.90 on the Nasdaq. Up to Wednesday's close, shares have fallen nearly 5 percent since the company last reported results in May.

(Reporting By Arathy S Nair and Anya George Tharakan in Bengaluru; Editing by Saumyadeb Chakrabarty)