Cisco shares fall eight per cent despite strong growth

Cisco profits up 27 per for for FY2010

Network giant Cisco's full-year results show revenue up 11 per cent to $40bn (£25.6bn) and profits up 27 per cent to $7.8bn. However, shares fell sharply – by eight per cent – with analysts saying they were disappointed with results that were short of Wall Street forecasts.

Revenue for the quarter had been forecast at $10.9bn and fell short by $0.1bn to come in at $10.8bn, arguably a drop in the ocean for the company. However, markets have become increasingly sensitive.

This shortfall coincides with forecast downgrades from the Bank of England as well as IT-specific forecasts from Gartner.

Prior to the fall in shares, Cisco chief executive John Chambers said: "The company has a compelling financial model, a well-tuned innovation engine and solid execution on our growth strategy."

However, he also said to analysts on Wednesday: "We are seeing a large number of mixed signals in both the markets and our customers' expectations and we think the words 'unusual uncertainty' are an accurate description of what is occurring. "

Compared with the full year, the company showed even more impressive figures in the fourth quarter 2010, with revenue up 27 per cent to $10.8bn and profits up 79 per cent to $1.9bn.

In a conference call, Cisco said emerging markets showed the strongest demand, with orders up 35 per cent. In Europe orders were in the mid-20s while overall orders increased 23 per cent on the previous year.

Cisco's biggest earner was its switches portfolio, which showed a 12 per cent year-on-year growth to $13.3bn.