In a clear sign that the network equipment market has rebounded, Cisco CEO John Chambers will draw his regular salary again.
In April 2001, he waived his annual $350,000 salary and bonus package until the company’s performance improved — and now it has.
On Tuesday afternoon, Cisco posted strong financial results for its fourth quarter in a recovering network equipment market and surging overseas business.
Its cautious outlook for the second half of the year however, caused concern among investors who sent the stock down $2.06, or 10 percent, to $18.40 per share in early trading Wednesday morning.
The company had net income of $1.4 billion, or 20 cents per share for the quarter, compared with $982 million, or 14 cents per share, for the fourth quarter of fiscal 2003, and $1.2 billion, or 17 cents per share, for the previous quarter.
Cisco notched $5.9 billion in sales, a 26 percent jump over the fourth quarter of 2003 and a 5.4 percent jump from last quarter.
”This was a record-breaking quarter for Cisco on a number of financial and operational levels,” said Chambers.
He attributed the gains to Cisco’s core business and emerging technology areas, as well as investments the company has made around the world.
During a conference call with analysts and reporters, Chambers said orders from China, India and Russia were up more than 40 percent compared to the same period last year.
The company began hiring during the fourth quarter to meet its goal of adding 1,000 people this year, he said. It’s the first time in several years that the company has added employees, not counting acquisitions.
The company, which competes with Juniper, Nortel and others, did make several buys in the quarter, including Actona and Parc Technologies and the intellectual property assets of Procket Networks.
Industry watchers believe the sector has rebounded from its doldrums over the last two years, and that there is some momentum.
”While technology results, generally speaking, have disappointed investors, we believe network infrastructure is faring better than other groups driven by a replacement cycle,” analysts at SG Cowen said in a research note before Cisco’s earnings were announced.