Cisco Soothes Street's Concerns

Updated from 5:51 p.m. EDT

CiscoCSCO delivered a stronger-than-expected quarter, soothing concerns that the tech bellwether would show signs of deterioration amid a slowing economy.

The San Jose, Calif., networking giant said it had a fiscal third-quarter profit of $1.8 billion, or 29 cents a share, which fell from a profit of $1.9 billion, or 30 cents, in the year-ago quarter. Excluding acquisition-related charges, Cisco earned $2.3 billion, or 38 cents a share, which topped the Thomson Reuters average estimate by 2 cents.

Cisco said that revenue jumped 10.4% from a year ago to $9.8 billion, slightly above Wall Street's estimate of $9.75 billion. "We are reasonably comfortable with growth on the top line," said CEO John Chambers on the company's conference call late Tuesday, adding that he still expects long-term annual growth in a range of 12% to 17%.

Looking ahead to the fiscal fourth quarter, Chambers said that Cisco should see revenue rise in a range of 9% to 10%, citing the impacts of the broader economic picture. "We also see the economic challenges that the U.S. is experiencing," he said. "We are continuing to see that U.S. and some European customers remain cautious."

Analysts currently expect a 9.1% rise in revenue during the fiscal fourth quarter, according to Thomson Reuters. Shares of Cisco rose 1.2% in extended trading.

Traders had been on edge after Chambers reduced expectations for revenue in the fiscal third quarter. On the company's last conference call, Chambers cut Cisco's fiscal third-quarter guidance to 10% growth, down from the 15% previously expected. At the time, he said the company's long-term annual growth rate would be somewhere between 12% and 17%. During a presentation a month later, Chambers said he was "even more comfortable" with that growth rate.