Cisco shares fall eight per cent despite strong growth

Revenue up 11 per cent and profits up 27 per cent

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.