Updated from 4:41 p.m. EDT

Technology giant

Cisco Systems

(CSCO) - Get Cisco Systems, Inc. Report

said Tuesday that strong revenue growth helped drive a 58% increase in its much-anticipated earnings for the fiscal third quarter, beating Wall Street's expectations by a penny.

The San Jose, Calif.-based maker of routers and switches for the Internet reported pro forma net income of $1.03 billion, or 14 cents a share, compared with $649 million, or 9 cents a share in the year-earlier period.

Wall Street had expected the company to post earnings of 13 cents a share, according to a poll conducted by

First Call/Thomson Financial

. Earnings, however, fell below those cited in some media reports, which indicated earnings per share of as much as 15 cents.

Revenues for the quarter surged 55%, to $4.92 billion, compared with $3.17 billion in the 1999 quarter, as the company sold more routers and fiber-optic equipment to Internet service providers and sales to smaller businesses helped to offset a slowdown in revenues from big businesses.

"Globally, business and government leaders are beginning to dramatically transform their traditional business models into Internet economy business models," John Chambers, Cisco's president and chief executive, said in a statement. "Customers are increasingly seeking Cisco's expertise to help them through this transformation."

Including one-time items, Cisco reported net income of $662 million, or 9 cents a diluted share, in its third quarter, compared with $636 million, or 9 cents a share, a year earlier. Operating profit exceeded $1 billion for the first time.

Cisco's shares rose in heavy after-hours trading following the earnings report, which was posted after the 4 p.m. EDT stock market close. According to

Instinet

, Cisco was lately trading up 3/16, or 0.3%, at 63. The stock ended regular trading up 1/16, or 0.1%, at 62 13/16.

Some of the one-time costs stemmed from acquisition charges. Cisco posted one-time charges of $488 million, or about 6 cents a share, after taxes in the quarter after completing the acquisitions of

Aironet Wireless Communications

and

Pirelli Optical Systems

during the quarter. During the quarter Cisco also acquired

TheStreet Recommends

Altiga Networks

,

Compatible Systems

and

Growth Networks

, which were accounted for as pooling of interests.

On Tuesday, Cisco also said the

Securities and Exchange Commission

was investigating the possibility of insider trading in

ArrowPoint Communications'

shares. The company's stock price surged 27% Thursday, a day before Cisco announced its intentions to buy ArrowPoint in a deal now valued at about $5.6 billion.

Investors have been awaiting Cisco's earnings report following an article in the latest issue of

Barron's

that questioned the company's high stock price. The magazine also said changes in the company's accounting practices could weigh on its ability to make acquisitions.

Stephen Koffler, an analyst at

First Union Securities

, said the earnings should do a great deal of damage control following the article, which sent Cisco's share price plunging 7% on Monday.

Koffler said the earnings were "very strong", noting a 13% increase in sequential revenue growth, the company's success in beating the estimates despite a two-for-one stock split in March and a jump in research and development expenses.

"When you split the stock two-for-one, it makes it a lot harder to beat the estimate," said Koffler, who rates Cisco a strong buy and has not done any underwriting for the company.

"They are also reinvesting aggressively in research and development and are still generating enough of a profit to beat the estimates," Koffler added.

R&D expenses rose to 14.4% of sales in the third quarter from 13.7%.