Business

Cisco raises dividend as profits beat expectations

  • 16 August 2012
  • From the section Business
Cisco
Image caption Cisco has been undergoing restructuring

Technology giant Cisco, the world's largest maker of networking equipment, has increased its dividend after reporting better-than-expected results.

The company said cost cutting helped fourth quarter net income to rise to $1.9bn (£1.2bn) from $1.2bn a year ago, on revenue up 4.4% to $11.7bn, despite difficulties in Europe.

Cisco also said it would raise its dividend by 75% to 14 cents a share.

The company's shares rose 5% to $18.23 in after-hours trading on the news.

Chief executive John Chambers forecast revenue growth of between 2-4% in the next quarter, but warned of continuing uncertainty in Europe, a key market, which was creating an environment in which it was difficult to clinch business deals.

"That's probably going to get tougher before it gets better and that might last for a good little while," he said in a conference call.

As a result, "many of our customers continue to anticipate a challenging next 12 months on a global basis and therefore these CEOs will remain conservative both in their IT expenditures but also in their hiring".

Cisco is undergoing a restructuring programme that aims to cut expenses by about $1bn. Last month it announced it would cut 1,300 jobs.

The job cuts represent about 2% of Cisco Systems' 65,000 strong workforce. Last year, the company shed 10,000 posts.

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