Cisco CEO Sees Economic Recovery in Late '08

Cisco SystemsChief Executive John Chambers said Wednesday the company is "extremely comfortable" with its long-term growth target and expects the economy to start recovering toward the end of the year.

Cisco Systems
Paul Sakuma
Cisco Systems

The top network equipment maker has forecast long-term annual revenue growth of 12 percent to 17 percent, although growth slowed to around 10 percent in the quarter that ended in late April.

"We're still extremely comfortable with the 12 to 17 percent," Chambers told Reuters during a visit to New York.

"I've gained more clarity on how we're going to do it," he said, referring to the company's expansion from its core business of making routers and switches to newer areas such as video and mobile technology.

Chambers, considered a good trend reader for U.S. business activity, said he expected an economic recovery later this year.

"The most likely scenario would be that the economy would start to pick up towards the end of the calendar year," he said, adding that he has been speaking to customers as well as economic leaders.

"Most people still believe that is the most likely scenario. That's clearly what I'm going to build my business plan to, and we'll adjust if it doesn't occur, if it recovers quicker or recovers slower."

Cisco shares rose as much as 1.8 percent to $26.04 in early trading on the Nasdaq, but later shed those gains and were trading at around $25.55 by mid-morning.