Cisco announce profits rise as revenues fall

Cisco Systems has announced that net income for the company has risen 35% but revenue has fallen by 42%.

For the third quarter, the company reported net income of $987m (€866m), or 14 cents a share, compared with $729m (€640m), or 10 cents a share last year.

The company’s gross margins were the highest ever at 70.8%.

Revenue was $4.62bn (€4.06bn) for the quarter compared with $4.8bn (€4.2bn) a year ago.

The outlook for the fourth quarter showed no improvement.

John Chambers, President and CEO of Cisco said that there was a lot of uncertainty in the economy but said that he was slightly more cautiously optimistic than he had been three months ago.

The lower sales at Cisco and the flat outlook are worrying.

They show that as yet there is no improvement in corporate spending.

About 80% of Cisco’s sales are to corporate customers.

However, a large part of Cisco’s sales are to the telecoms sector which has been particularly badly hit in the downturn.