Here's the news tech investors were craving: big time beats from Cisco Systems on the top and bottom lines, gross margins, and some very optimistic commentary from CEO John Chambers.

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[CSCO  Loading...      ()   ] reported 36 cents a share in non-GAAP EPS, and while that's 14 percent lower than the company's first quarter a year ago, it beat Street expectations by a nickel a share. Same with the top line, where Cisco reported $9 billion in revenue, about 13 percent lower than the same period last year, but well ahead of the $8.745 billion consensus.

The company is also getting it done operationally, reporting a surprisingly robust 66.3 percent gross margin. Wall Street anticipated 64 percent, which would have been a sequential decline from the 65.3 percent reported a quarter earlier. So an increase in this metric is a big, and positive surprise.

Cisco's board also authorized an additional $10 billion in stock buybacks.

From John Chambers in the company's earnings release: "Building off what we saw as a clear tipping point in Q4, our Q1 results continued to reflect strong sequential growth rends that meet or exceed expectations during normal economic times." He goes on to reference an "improving economic outlook," and then cites an "unparalleled opportunity to drive more value into the core of the network." In other words, better times lay ahead.

Cisco did report $35.3 billion in cash, which is only a fractional increase to what the company reported at the end of last quarter, so there may be a question or two about why the company wasn't able to bank more. I asked the company whether any of the cash connected to its $3 billion offers for Starent Networks and Tandberg had already been eliminated from the balance sheet and I was told that that won't happen until those deals close. So that $35.3 billion figure is solid, and doesn't include offers on the table.

Meantime, with consensus revenue estimates for Cisco in its second fiscal quarter at or near $8.96 billion, and the company's first quarter historically its slowest, it stands to reason that Cisco will beat Wall Street expectations and offer better than expected guidance. We'll see.

This is a big report at a time when Wall Street certainly needs it, especially with the Nasdaq giving back all its rally today at the close. Should be interesting to see how optimistic Chambers is when he talks to analysts tonight.

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