Despite a lagging economy, Cisco Systems profits rose 4.4 percent in the fourth quarter from a year earlier, as CEO John Chambers announced he was "very comfortable" with the company's long-term growth target.
The nation's largest maker of networking equipment said its revenue increased 9.9 percent to $10.3 billion, reassuring investors that the San Jose-based company can boost sales despite harsh economic conditions.
"Given the weak economy, the results are very good," Jerome Dodson, chief executive officer of Parnassus Investments in San Francisco, told Bloomberg News. "The stock should be trading at a higher price."
Chambers predicted economic turmoil would soon begin to wane, but not without some challenging quarters ahead. Chambers added that he was comfortable with Cisco's long-term growth market.
"Our comfort level in terms of long-term growth of 12 to 17 percent hasn't changed at all," said Chambers, according to Bloomberg News. "If you watch our history over the last 15 years, we've been very predictable on our forecast and direction."
Chambers said two sectors that proved troublesome in 2007, the financial industry and multinational companies, showed signs of revival during the fourth quarter, according to a New York Times report.
Cisco's revenue gains were attributed to $8.64 billion in product sales, while sales of services accounted for $1.72 billion. Fourth quarter profit was 40 cents per share, compared to 31 cents per share during the fourth quarter of 2007.
"It's still a tough environment out there, but Cisco has delivered very strong results, with revenue exceeding $10 billion for the first time in the company's history," Mark Sue, an analyst at RBC Capital Markets, told the Times.