[wsj] In a sharp reversal, Cisco Systems Inc. said its sales have stabilized and the prolonged slump in corporate spending on technology may have leveled off.
For the first time in months, the networking-equipment company's customers "are seeing some stabilization," Cisco Chief Executive John Chambers said Wednesday in a call with analysts. He added that "no one knows how long this leveling out will last or whether it will result in an upturn several quarters from now."
The comments came as Cisco reported a 24% drop in profit and a 17% drop in revenue for its fiscal quarter ended April 25. But the remarks are nonetheless a turnabout from earlier this year, when Mr. Chambers said businesses were increasingly scaling back their technology spending.
Cisco is one of the first tech companies to report earnings that include April, and it is widely seen as a barometer for the tech industry. The San Jose, Calif., company was among the first companies in 2007 to say the economic downturn that started with the financial sector would take a toll on tech spending.
Mr. Chambers is the latest in a series of tech CEOs to speak of improvements. Intel Corp. said the PC market had hit bottom during the first quarter, while Cisco rivals Juniper Networks Inc. and Alcatel-Lucent SA recently said the economy is starting to stabilize. In February, Mr. Chambers had said he expected the recession to end in late 2009, earlier than most prognosticators.
Cisco, in Shift, Sees Sales Steadying
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