has stepped up and given technology investors reason to celebrate.
On Wednesday, Cisco Chief Executive John Chambers said he was comfortable with analysts' estimates for first-quarter sales and earnings. Chambers tends to be eternally optimistic, but for the networking sector, where billions of dollars of market capitalization has been erased in the last year, his comments couldn't have come at a better time.
Wall Street expects Cisco to earn 2 cents a share in the first quarter on revenue of $4.16 billion. Shares of Cisco rose $2.41, or 21%, to $13.89 following the news.
The entire sector responded by moving higher.
were all up more than 20%.
was up 9% to $6.33.
One advantage Cisco has is timing. The company's first fiscal quarter ends Oct. 27, giving the company some time to rebound from the economic slowdown that was exacerbated by the terrorist attacks in New York and Washington on Sept. 11. Cisco plans to report the quarterly results on Nov. 5.
The company already tried in recent weeks to get the market moving again. In September, taking advantage of
buyback restrictions that were eased in the aftermath of the World Trade Center disaster, Cisco's board cleared the buyback of as much as $3 billion worth of stock over two years.
For the fourth quarter, the company posted earnings that fell 86% from the year-earlier period on a 25% drop in sales, owing to the telecom industry's well-documented slowdown in equipment spending. At the time, Cisco declined to offer an income projection for the first quarter or fiscal 2002. The company did say first-quarter sales could drop as much as 5% from the top line of $4.30 billion in the fourth quarter. Even if the company meets analysts' first-quarter targets, the numbers would still mark a mammoth decline from the same period a year ago, when sales totaled $6.52 billion and earnings came in at 18 cents a share.
Cisco's projection took some of the sting out of recent bad news from others. Tuesday,
third-quarter loss of $3.6 billion and pushed CEO John Roth out the door. The Brampton, Ont., company also projected sales for the quarter of $3.5 billion and said it would cut its total workforce to about 45,000 from the current level of less than 60,000. In France,
set plans to terminate more than 3,000 jobs in response to the deteriorating undersea network market and the slowdown in the optical fiber arena.
Not to be left out, Nortel was climbing 6.8% to $5.65, and Alcatel traded up 3.3% to $11.70.