Business

Cisco gloomy despite 20% rise in third quarter earnings

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Image caption Cisco Systems earnings are up but the outlook for technology spending remains gloomy

Cisco Systems, the world's largest maker of computer-networking equipment, has reported a 20% boost in third quarter earnings, amid fears of a slowdown in technology spending.

Cisco earned $2.2bn (£1.37bn) between February and April, compared with $1.8bn for the same period last year.

But chief executive John Chambers warned that continuing economic uncertainty was affecting client spending.

Cisco shares fell over 8% on the news.

Customers are waiting longer to close deals and spending less, Mr Chambers warned.

As a result the company forecasts that fourth quarter revenues from May to July will increase by between 2% and 5%, below analysts' forecasts.

Revenue for the February-to-April period was up 7% from a year earlier to $11.6bn.

Mr Chambers said: "We will muddle through this with a little bit of bumps in the road."

Cisco has been undergoing a severe round of cost-cutting over the past year, which is estimated to have shaved $1bn off the company's running costs.

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