Cautious Cisco Comments 'Over Interpreted': Chambers
Any cautious tone perceived by investors from comments by Cisco’s John Chambers was “over interpreted,” the CEO told CNBC Thursday.
“It doesn’t get any better than this,” Chambers said of the computer networking giant’s fiscal third-quarter results announced Wednesday. “We’re projecting growth of 25 percent to 28 percent next year and that’s not cautious. That’s pretty darn good,” he added.
On a conference call Wednesday, Chambers said that while the company was making the most of improving business sentiment and was gaining market share, there was need for some caution as U.S. employment data was still weak.
Cisco's shares trended lower in the wake of those comments. The shares were recently down about 3 percent in the first hour of trading and the company was the biggest decliner on the Dow at one point.
The company reported earnings of 42 cents a share, excluding one-time items, up from 30 cents a share a year ago on revenue of $10.37 billion, up from $8.2 billion a year ago. “We’re hitting on all cylinders,” Chambers said.
Cisco has not seen any impact from the European debt crisis at this time. Sales in the region were up about 30 percent year over year, Chambers said. He added he would be surprised if the region does not grow by “double-digits” in this quarter as well.
However, he told investors he would keep an eye on Europe — which accounts for more than 20 percent of Cisco's revenue — even though recent worries over sovereign debt didn't appear to be escalating.
"Given all the uncertainties regarding the strength and shape of the recovery, concerns about the recovery possibly slowing and the unknown extent of job creation, we encourage you to wait for additional economic data before becoming too optimistic,'' Chambers said.
Chambers sees technology firms “committing to IT (information technology) and spending more there.”