Cisco profit edges past estimates as revenue rises 5 percent

By Reuters

May 13, 2015 06:45 PM EDT

Network equipment maker Cisco Systems Inc's (CSCO.O) quarterly profit was a cent ahead of market estimates as new switches, routers, wireless gear and servers drove demand.

Cisco is transitioning towards a cycle of high-end switches and routers. It has been investing in new products such as data analytics software and cloud management tools to offset slowing growth for its mainstay switches and routers.

Chief Executive John Chambers will step down in July after 20 years at the helm, the company said last week. Company veteran Chuck Robbins will take over as CEO.

Several analysts have interpreted the transition as a signal of changing priorities of the company, which is struggling to boost bottom line in the era of cloud computing.

Switching business accounted for more than a third of Cisco's revenue while the routing business brought in nearly a quarter of sales in the year ended last July.

The company's net profit rose to $2.44 billion, or 47 cents per share, in the third quarter ended April 25, from $2.18 billion, or 42 cents per share, a year earlier.

On an adjusted basis, the company earned 54 cents per share.

Revenue rose 5.1 percent to $12.14 billion.

Analysts on average had expected a profit of 53 cents per share on revenue of $12.07 billion, according to Thomson Reuters I/B/E/S.

Cisco shares were marginally down in after-market trading on Wednesday.

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