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Cisco Reports Profit for Second Quarter
Cisco Systems, Inc. reported that its earnings increased by 50% in the second quarter of its fiscal year, with net income of $991 million on revenue of $4.7 billion. This was a surprise to analysts who had predicted that Cisco's numbers would reflect the general slump in corporate technology spending. Cisco's net income for the same period in 2002 was $660 million. Cisco's Chief Executive issued a statement regarding the results on Tuesday, noting, "In what is probably the most challenging environment the information technology industry has ever faced, we are very pleased with our results in posting one of the best pro forma quarters in our history." Cisco Systems makes and sells networking infrastructure hardware to large corporations and is a leading supplier for Internet infrastructure hardware.
Cisco has been impacted by the dramatic decline in corporate IT spending and by the near meltdown that has occurred within the telecommunications industry over the past several years. In addition to the challenges of selling hardware in a slow economy, Cisco has seen tough competition from competitors Dell Computer Company and Huawei Technologies Company Ltd., a Chinese company that has been constantly trying to undercut Cisco's prices. In January, Cisco filed a copyright and patent infringement action in Federal Court against Huawei Technologies for allegedly illegally copying Cisco's documentation, software code and other proprietary aspects of Cisco's intellectual property.
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