Cisco Nails It, Sees Healing Economy

(Updated with remarks from Cisco's post-earnings conference call)

NEW YORK (TheStreet) -- Cisco (CSCO Quote) delivered a strong, target-beating report Wednesday and sees the beginning of an upswing that could help boost the tech sector.

The networking gearmaker posted adjusted earnings of 36 cents a share, down from 42 cents in the year-ago period but better than analysts' earnings target of 31 cents, according to Yahoo Finance.

Sales for the fiscal first quarter ended last month were $9 billion, down 13% from the $10.33 billion level last year. Analysts were looking for sales of $8.74 billion.

"Building off what we saw as a clear tipping point in the fiscal fourth quarter, our first quarter results continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times," CEO John Chamber said in a press release Wednesday.

Hinting at a sunnier forecast, Chambers added: "We view the improving economic outlook, combined with solid execution on our growth strategy, as creating unparalleled opportunity to drive more value into the core of the network."

Cisco shares were up 4% to $24.09 in afterhours trading Wednesday.

Looking ahead, analysts expect Cisco to post 3% sequential sales growth in the fiscal second quarter. Chambers is expected to offer earnings and sales targets during a conference call later.

Some highlights from the fiscal first quarter include a widening of gross margins to 65.3% from 64.6% a year ago. Cisco's book-to-bill ratio, a measure of orders coming in to shipments going out, was greater than one, a bullish indicator.

At the opening of the earnings conference call, Chambers said the August quarter "felt like the bottom and looking back was probably the beginning of the upturn.