Cisco Systems Inc. (CSCO) - Get Report shares traded sharply higher Thursday after the network equipment maker posted better-than-expected second quarter earnings and said growth from its newer business units would continue to drive sales over the near term.

Cisco said adjusted non-GAAP earnings for the three months ending in January came in at 73 cents per share, topping the Street consensus forecast by a penny and rising 15.9% from the same period last year. Group revenues, Cisco said, jumped 4.7% to $12.45 billion, and should rise between 4% and 6% over the first three months of this year, the company's fiscal third quarter, as more and more sales are generated by its software and security businesses.

The company also said that it continues to compete well in China, the world's largest market, and hasn't yet felt the impact of trade tensions between Washington and Beijing.

"I think our portfolio right now from an innovation perspective, and particularly with the work the teams are doing in the SP space and the work that we're doing around the 5G packet core and some of these next generation platforms that are going to hit the market this year, I would put our innovation up against there as anybody else's in the world right now," CEO Chuck Robbins told investors on a conference call late Wednesday.

"And so I feel very confident that not only can we compete, but that we are and we're winning right now," he added. "And so the share comment from them could be related to the size of the Chinese market and they're confident that the math works, but in other parts of the world, I'll tell you we're doing really well right now."

Action Alerts PLUS holding Cisco shares were marked 4.4% higher Thursday and changing hands at $49.62 in the opening minutes of trading, a move that would extend the Dow component's three-month gain to around 6.4%.

Software sales rose 24% to $1.47 billion, the company said, with around 65% of that total coming from subscription sales, indicating the potential for recurring revenue gains in the quarters ahead. Security business revenues rose 18% to $656 million.  

Separately, the company also announced that its board approved a $15 billion share buyback plan, and that it also increased its quarterly dividend by 6% to 35 cents per share, payable April 24 to shareholders of record on April 5.