NEW YORK (Reuters) – Cisco Systems Inc. shares rose as much as 9 percent on Thursday after the leading network equipment maker reported stronger-than-expected quarterly results and gave an upbeat forecast for the current period.
The stock was up $1.82, or 7.3 percent, at $26.92 in early Nasdaq trade after rising to $27.44, its highest level since January 2004.
After Wednesday’s market close, the company said profit before special items rose to $1.9 billion, or 31 cents per share, in the first quarter ended on October 28 from $1.6 billion, or 25 cents per share, a year earlier.
That beat the analysts’ average forecast of 29 cents per share, according to Reuters Estimates, and prompted several analysts to upgrade their views on the stock.
Chief Executive John Chambers had also forecast second-quarter revenue growth of 24 percent to 25 percent from a year earlier, saying the company was enjoying broad-based growth, including at its traditional routers and switches business and its cable set-top box unit Scientific-Atlanta.
Banc of America raised its price target on Cisco to $30 from $27, reiterating a “buy” rating.
Prudential Equity Group raised its target price to $26 from $24, and reiterated an “overweight” rating.
“We believe Cisco continues to gain share in its core markets, while also building a meaningful, and increasingly dominant, presence in new markets, such as video and IP communications,” Prudential Equity analyst Inder Singh said in a report.
“Given their recent momentum, and Cisco’s strong results this quarter, we would not be surprised to see shares trade above our price target over the remainder of calendar 2006,” he said. However, he added that he was wary of applying a higher valuation as the stock had already rallied strongly this year.
Cisco shares have risen nearly 60 percent since the start of the year, compared with a 7 percent rise in the Nasdaq 100 and a 11 percent fall in Juniper Networks.
Juniper shares rose nearly 6 percent in early trade to $19.76, helped by Cisco’s news.