SAN JOSE, California -- Networking giant Cisco Systems Inc. said its fiscal first-quarter earnings slumped amid the broader economic slowdown.
The San Jose, California company, which makes the gear that helps power the Internet, said its operating earnings fell to $332 million, or 4 cents a share, from $1.4 billion, or 18 cents a share, in the same period last year.
Sales for the quarter ending Oct. 31 fell 32 percent to $4.4 billion from $6.52 billion last year. They rose from the previous quarter's $4.3 billion.
Analysts had expected the company to earn 2 cents a share, with a range of 1 cent to 3 cents, according to Thomson Financial/First Call, which tracks such data. Analysts also forecast first-quarter sales of $4.17 billion.
"Given the very challenging economic and capital spending environment, we were pleased to deliver a solid quarter with good order linearity, sequential revenue growth and profitable market share gains," President and Chief Executive John Chambers said in a statement.
Chambers said last month he was "very comfortable" with Wall Street's estimates. Cisco (CSCO) said in August first-quarter sales would be from flat to down 5 percent from the fourth quarter.
The company posted a net loss in the quarter of $268 million, or 4 cents a share, compared with a net gain last year of $798 million, or 11 cents a share.
The results included a non-cash $858 million impairment charge on certain investments, about $189 million for two acquisitions and a $37 million one-time charge, or about 1 cent a share after taxes, for a write-off of in-process research and development.
Cisco's shares closed up 64 cents, or 3.7 percent, at $17.90 in Nasdaq trading, before the results were announced. Since the beginning of the year, the stock has outperformed its peers in the American Stock Exchange Networking index by about 19 percent.
While capital spending among telephone carriers and corporations has been weak -- hurting larger players such as Canadian telecom equipment giant Nortel Networks Corp. -- smaller networking firms such as rival Juniper Networks and Riverstone Networks have provided hope with strong results or forecasts of growth.
Last month, Nortel posted a $3.5 billion third-quarter loss. And Lucent Technologies Inc.'s $8.8 billion fourth-quarter loss was its largest-ever loss in a three-month period and was due largely to restructuring charges.
Also last month, Juniper posted a $29.7 million third-quarter net loss but surprised and encouraged analysts with operating results that held steady from the previous quarter. Riverstone forecast revenue growth next quarter of 8 to 10 percent.
