Cisco posts lower first-quarter earnings on stock-options expense |

Cisco posts lower first-quarter earnings on stock-options expense

SAN JOSE, Calif. – Cisco Systems Inc. posted lower fiscal first-quarter earnings but higher sales Wednesday after the network equipment maker was required to take into account the expense of employee stock options for the first time.San Jose-based Cisco, which with other Silicon Valley companies lost a multiyear fight against expensing options, said its profits would have grown over last year without the $228 million charge that was required by a Financial Standards Accounting Board decision.For the three months ended Oct. 29, Cisco earned $1.26 billion, or 20 cents per share, compared with $1.4 billion, or 21 cents per share, in the first quarter of 2005. Sales jumped 10 percent, to $6.55 billion from $5.97 billion.If the stock-option expensing rule had been in effect last year, the company said it would have posted earnings of $1.12 billion, or 17 cents per share, in that period.Excluding one-time items, Cisco earned $1.6 billion, or 25 cents per share, compared with $1.5 billion, or 21 cents per share for the first quarter of fiscal 2005.Analysts were expecting Cisco to earn 24 cents per share on sales of $6.58 billion, according to a survey by Thomson Financial.John Chambers, Cisco’s chief executive, said the quarter was strong despite the stock-options expense. He credited strong demand by customers who are not only buying traditional routers and switches but coupling them with more advanced technologies such as Internet telephones and wireless devices.”Cisco’s long-term product architecture strategy is taking hold,” he said.Chambers also said the company experienced “balanced execution” across most geographies, market segments and product categories.”We are especially pleased with the improving business momentum in the U.S. and Asia Pacific, the strength of our product families and the accelerated growth of the commercial marketplace,” he said.The results were announced after financial markets closed. Earlier, shares of Cisco finished at $17.75, down 11 cents, on the Nasdaq Stock Market. In the after-hours session, they gained 45 cents, or 2.5 percent.Vail, Colorado

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