Updated from 5:11 p.m. EDT
blew by analysts estimates for its fiscal third quarter.
The networking gearmaker posted an adjusted profit, excluding special items of 30 cents a shares, down from 38 cents in the year-ago quarter, but ahead of analysts' expectations for a pro forma profit of 25 cents a share, according to Yahoo! Finance.
Sales for Cisco's fiscal third quarter ended last month were $8.2 billion, down from the $9.79 billion level at the same time last year. Analysts were looking for $8.07 billion in sales for the April quarter.
Cisco expanded its gross margin to 64.1% from 63% in the prior quarter, but saw a drop in cash generated from operations, falling $2 billion from $3.2 billion in prior quarters.
"Cisco delivered solid financial performance despite a challenging global economy and period of evolving market dynamics," CEO John Chambers said in a press release.
Cisco shares were up 30 cents, or 1.5%, to $19.91 in afterhours trading Wednesday.
Wall Street was eagerly
for the current quarter and business in general. During a conference call to discuss quarterly results, Chambers took a very cautious approach, saying it was difficult to make a certain forecast.
Chambers did say sales for the July quarter would be down 17% to 20% from year-ago levels. That puts the revenue range between $8.3 billion to $8.6 billion or a midpoint of $8.45 billion. That is better than analysts' estimates, which call for sales of $8.26 billion.
Chambers said that customers were reporting "stabilization" and a "leveling off" compared to continued deceleration in orders in prior quarters. He also said the book-to-bill rate, commonly a measure of orders coming in to shipments going out, was running at a ratio of 1. That suggests that orders are holding a steady pace but are not necessarily growing.
Regarding layoffs, Cisco had
that it would cut about 1,500 jobs. And there had been speculation that Cisco would have to slash more jobs to keep costs in line with falling sales. Chambers addressed those concerns the conference call. "If business were to change, layoffs would be necessarily," Chambers said, "but at the current time, it looks like we will be able to avoid a broad based layoff or drastic cut in salaries."
. The short interest in Cisco's stock is only down slightly from a recent one-year high. There are 75.1 million shares shorted, meaning investors have borrowed the stock and hope to repay it at a lower price. That compares with 76.6 million shares shorted in March.