Cisco reports strong quarter

Cisco Systems posted a $664 million profit for the company's second quarter
of fiscal 2002. Although half the $1.3 billion it earned a year earlier, Wall
Street had expected only about $400 million in earnings. Sales fell 29 per cent
to $4.8 billion from the record quarterly high of $6.75 billion in the same
period a year earlier.

Cisco disclosed its financial results earlier than expected after an email
was accidentally sent to company employees. The email talked about a good
quarter and in which order bookings for products exceeded internal goals.

The results show Cisco remains on top of the networking gear industry and
continues to out-perform competitors such as Lucent. The company's second
quarter profits were double the earnings in the preceding first quarter.
"In almost every area of our business we've seen positive evidence of our
strategy working, from market share gains and cash generation to inventory turns
and gross margin improvements,'' said Cisco CEO John Chambers who called the
results a ''solid quarter.''

Chambers added that customer budgets now have the flexibility to rise,
meaning the networking industry has hit bottom and is starting a new era of
growth be it at a much less frantic pace than during the 1998-2000 era.