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Cisco’s Strong Profit Lifts Shares 9%

February 10, 2016, 9:42 PM UTC
Robbins listens a question from media during a news conference in New Delhi
Chuck Robbins, incoming CEO of Cisco, listens a question from media during a news conference in New Delhi, India, June 18, 2015. REUTERS/Adnan Abidi - RTX1H2S1
Photograph by Adnan Abidi — Reuters

(Reuters) – Network equipment maker Cisco Systems reported a bigger-than-expected quarterly profit, helped by higher demand for its routers and security products, and added $15 billion to its share buyback program.

The company’s shares (CSCO) rose 9.2% in after-market trading on Wednesday.

Cisco is shifting to high-end switches and routers and investing in new products such as data analytics software and cloud-based tools for data centers.

Revenue in the company’s routers business rose 5% to $1.85 billion in the second quarter ended Jan. 23, Cisco said.

Revenue in the switches business, the company’s biggest, fell 4% to $3.48 billion.

Security business revenue rose 11% to $462 million.

Cisco boosted its current share buyback plan of $97 billion, of which $16.9 billion was remaining, by $15 billion.

Net income rose to $3.1 billion, or 62 cents per share, from $2.40 billion, or 46 cents per share, a year earlier.

Excluding items, the company earned 57 cents per share, beating the average analyst estimate of 54 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 2% to $11.8 billion, excluding revenue from the customer premises equipment portion of the service provider video connected devices business that was divested.