Cisco forecast signals recovery in IT spending

A solid forecast from U.S.-based network equipment supplier Cisco for the current quarter has raised hopes on the stock market for a recovery in IT spending.

Cisco shares rose by around 5 per cent in after-hours trading on Wednesday.

Cisco predicted sales of between 13.4 billion dollars and 13.6 billion dollars for the current quarter.

Analysts had expected an average of 13.5 billion dollars.

Cisco’s earnings per share forecast was also slightly above expectations.

Chief executive Chuck Robbins is working on expanding Cisco’s network technology business with software and services.

In Cisco’s third financial quarter, which ended at the end of April, sales fell by 13per cent year-on-year to 12.7 billion dollars.

Profits fell from 3.2 billion dollars a year earlier to just under 1.9 billion dollars, the company announced after the U.S. stock exchange closed on Wednesday.