Display results from Cisco surprising strength

Quarterly results from networking equipment maker show both positive and negative signs

Cisco's core business of making switches and routers, which are used to help connect computers to each other and the Internet, has been under pressure from increasing competition.

 Cisco Systems Inc. posted a 31% jump in quarterly net profit on Wednesday but has shown signs of weakening economic conditions have taken a toll on companies that giant network equipment serves.

The company based in San Jose, California, whose results are closely watched as an indicator of demand for technology companies, has also increased its dividend and share repurchase quarterly plan, and increased income is projected for quarter than some analysts had expected.

Its shares, 17% since the beginning of 2016, increased by 7% in extended trading after the news.

Cisco numbers for the period ending in January showed both positive and negative signs, which the company attributed partly to telecommunications services regular purchase and prudence among other corporate clients.

For example, the company said revenue rose 5% in a sector of routing equipment have declined recently, a class of widely equipment acquired by the media. Video equipment purchased by companies increased by 37%. Security and collaboration products also increased.

But most switching business sales fell by only 4% of the speed Cisco, reversing a recent trend. The number of cases of group of Cisco data centers, led by sales of server systems, declined 3% after rising 24% in the period ending in October.

Chuck Robbins, CEO of Cisco, said the company began to hear warning signals from some corporate customers in January, towards the end of the quarter. In response to events such as the decline in stock prices, he said, companies have begun to receive orders not essential, such as certain types of switching systems used in campus company buys.

"They tried to adjust to what was going on," Robbins said. "They just took a break a little."

Moreover, Cisco seems to have managed to move from one slide to long term business in China. The company had been injured therefore suspected that the material could be used by Chinese spies and the emergence of credible alternative products from local suppliers such as Huawei Technologies Co. In November, Cisco had reported 40% increase in orders China. The company said orders increased 64% in another for the period ended in January, driven by demand for video equipment.

Cisco has faced a change throughout the industry some functions of network software from the hardware that was his specialty. Mr. Robbins and predecessor, John Chambers, who resigned last summer as CEO, responded trying to build a new software and services that can generate recurring income.

To underline the belief that Cisco can overcome the current turmoil, the company on Wednesday raised its quarterly dividend by 24% and increased its share repurchase plan of $ 15 billion.

"I'm very confident," Robbins said.

In total, Cisco said the net profit for the period ended January 23 rose to $ 3.15 billion, or 62 cents per share, compared to $ 2.4 billion, or 46 cents per share. On an adjusted basis, which includes items such as stock-based compensation and related tax profit, earnings per share of the company rose 57 cents from 53 cents a year ago.

Total revenue fell slightly to $ 11.93 billion from $ 11.94 billion a year ago. Excluding a video of Cisco business divested in November, the company turnover increased by 2% to $ 11.8 billion.

Analysts polled by Thomson Reuters expected a profit of 54 cents a share, on revenue of $ 11.75 trillion adjusted.

For its fiscal third quarter, Cisco expects earnings per share adjusted earnings per share of between 54 cents and 56 cents, and revenue growth of between 1% and 4%. Analysts on average expected earnings on a similar basis of 55 cents per share on revenue of sliding 1%, according to Thomson Reuters.