Cisco&#39;s Chambers Expects Slower 2nd-Qtr Sales Growth
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Cisco Systems Inc. shares had their biggest decline in three months, dragging down other technology stocks, after Chief Executive John Chambers said sales growth will slow this quarter
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Cisco Systems Inc. CSCO.O, the  largest maker of communications gear to direct traffic over the  Internet, on Tuesday said quarterly earnings rose, but shares  fell in after market trading amid concerns about weak revenue  and rising inventory.
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A weak forecast from Cisco marked another roller-coaster week for technology companies on the stock market.The Nasdaq, home to many tech companies, suffered a gut-wrenching 3.1 percent drop Tuesday after a U.S. service sector report showed a decline in the nonmanufacturing index from December to January. Though the index recovered somewhat during the rest of the week, the Tuesday drop was yet another demonstration that IT investors are worried that a broad economic slowdown will affect technology. The decline in the nonmanufacturing sector was the first such drop since the beginning of 2003.Cisco&#39;s earnings report&#160;on Wednesday reinforced concerns that the broader economy will have an impact on IT. Cisco forecast revenue for its current fiscal quarter to increase 10 percent, compared to analyst consensus expectations of 15 percent, according to Thomson Financial. On a conference call with analysts, CEO John Chambers said the upcoming quarters will be &quot;extremely challenging.&quot;Confirming fears of market watchers, he also noted that &quot;we are seeing our U.S. and European customers becoming increasingly cautious.&quot;However, sales for the fiscal quarter ending Jan. 26 were up by 16.5 percent to $9.8 billion. The company has been saying for some time that it will sustain double-digit growth through the rest of the decade by incorporating data, voice, video, and mobile capabilities -- its &quot;quadruple play&quot; -- across product lines.Despite the muted forecast, market watchers still have faith in the company. Company shares rose slightly the day after the report, closing at $23.38, up by $0.30.The &quot;quadruple play&quot; pitch still resonates with analysts, and several company watchers noted that Cisco shares have declined along with the wider market over the last few months, giving it a good valuation for long-term investors. Pacific Crest analyst Tim Daubenspeck upgraded the stock to &quot;Outperform&quot; from &quot;Sector Perform.&quot;&quot;Ultimately, we believe that many of the drivers are firmly in place for Cisco to achieve its long-term growth forecast of 12 percent to 17 percent,&quot; he said in a research note.Chambers&#39; cautious forecast, however, could have a bad effect on its suppliers and customers, including electronics manufacturing services and telecom companies. On Thursday, Qwest Communications dropped $0.29 to close at $5.27, Sprint Nextel declined by $0.6 to close at $9.56, and Nortel Networks dropped $0.55 to $10.99.In other telecom-sector news,&#160;Alcatel-Lucent&#160;on Friday said revenue for its fourth quarter increased 18 percent to $7.61 billion. The company, however, suffered a net loss of $3.76 billion, mainly because of a writedown related to the shrinking value of assets from Lucent. Company shares declined by $0.29 to $5.96 in midafternoon trading.Citigroup Global Equity Research said that the Cisco forecast does not bode well for electronics manufacturing suppliers. &quot;Simply put, this is not good news for EMS [electronics manufacturing services] companies,&quot; wrote Citigroup&#39;s Jim Suva in a research note.Such companies include Jabil Circuit, Celestica, and Smart Modular Technologies, he noted.In other technology sectors, Time Warner&#39;s plans to&#160;split up the Internet access and audience businesses of its AOL unit, reiterated by CEO Jeff Bewkes Wednesday, gave a temporary boost to Time Warner shares. Time Warner wants to grow AOL&#39;s ad-supported audience business, including online services and content.The company had said before that it would at some point run the two businesses as separate entities, to better focus on the advertising business. Nevertheless, company shares rose $0.31 Wednesday to close at $15.71.But the company has an uphill battle. In the fourth quarter, AOL&#39;s ad revenue increased 18 percent, less than the 25 percent industry average. And it faces not only Google, but a potentially strengthened Microsoft, if its&#160;bid to buy Yahoo&#160;succeeds.
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The network equipment maker reported that its quarterly net income grew 7.2 percent amid growing concern that economic weakness could affect technology spending.
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Executives at networking giant Cisco Systems say the company&#39;s new CRS-1 core Internet router is ahead of revenue targets, just as the company announced on Sunday a smaller version of the product.
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Nortel Networks Corp. NT.TO warned on  Thursday that third-quarter sales will fall below its second  quarter and that full-year 2004 revenues at North America's  largest telecom equipment maker will lag the overall sector.
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Cisco Systems has reported first-quarter profits of $1.4 on sales of $6 billion. Despite cautious spending by its corporate customers, softness in the global economy and a lingering uncertainty over whether
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Nortel Networks said on Thursday it expects third-quarter revenue to fall short of the $2.6bn (Â£1.4bn) sales it posted in the second quarter of 2004.
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The Commerce Department said Friday US economic growth in the second quarter grew at its slowest pace since the first quarter of 2003.
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Cisco Systems Inc  CEO John Chambers said on Wednesday his company was hit by "dramatic decreases" in orders from U.S. banks, triggering concerns about its growth prospects and sending its shares plunging.
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CEO says firm saw no sales slowdown. Could results help calm waters after bad news from HP and Cisco?
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Cisco Systems Inc  posted a 7.2 percent rise in quarterly profit on Wednesday as demand for network equipment from telephone companies was steady despite the slowing U.S. economy.
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Cisco (NASDAQ: CSCO), the worldwide leader in networking that transforms how people connect, communicate and collaborate, reported its second quarter results for the period ended January 27, 2007.
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Cisco posted net income of $1.9 billion, or $0.31 per share, on revenue of $8.4 billion in its fiscal second quarter financial results reported Tuesday, exceeding revenue but matching earnings per share estimates of analysts.
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By JORDAN ROBERTSON  SAN FRANCISCO - Despite a robust second quarter and a sunny financial forecast, networking equipment maker Cisco Systems Inc. is coming under intense scrutiny over fears about the company's ability to sustain its torrid growth rates.
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Cisco Systems (NASDAQ: CSCO) has scheduled a conference call on Tuesday, February  6, 2007 at 1:30 PM (PT) to announce its second quarter fiscal year 2007 financial results.
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Cisco Systems Inc.  is  expected to post higher quarterly sales as companies upgraded  their communications networks, but analysts say the outlook is  clouded by an economic slowdown and mergers among rivals.