Cisco posts solid financial results

Cisco Systems posted solid financial results for its first quarter despite the worsening economy, but the networking giant plans to institute a hiring freeze as it braces for further economic turmoil.

Sales for the quarter, which ended Oct. 25, reached US$10.3 billion, up 8 percent compared to the same period last year.

But net income was essentially flat compared to the same period a year earlier, at $2.2 billion based on generally accepted accounting practices.

Not counting certain charges, Cisco's earnings per share for the quarter were $0.42, beating analyst expectations of $0.39, as polled by Thomson Reuters.

While Chairman and CEO John Chambers said he's confident that Cisco can weather -- and ultimately even prosper from -- the current economic storm, he outlined ways that Cisco plans to cut back. The hiring freeze, combined with other efforts such as a reduction in travel, events and marketing expenditures, should help the company reduce expenses by $1 billion from its original budget for its second quarter, he said during a conference call Wednesday.

Chambers painted a grim picture of the financial crisis. Cisco saw a dramatic downturn in orders during October, a month few other large companies have yet reported on. Orders were up 7 percent in August, but by October they had decreased by 9 percent compared to the previous year, he said. Overall, orders decreased 3 percent in the quarter.