Internet equipment maker Cisco Systems has reported a big slump in first-quarter earnings as the broader US economy slows.

The world's biggest maker of networking hardware on which the internet is built, said its operating profit fell to $332m from $1.4bn in the same period last year.

That was still double Wall Street analysts' expectations, sending shares higher in after-hours trade.

The results were seen by many analysts as a sign that the slump in the telecoms sector may have bottomed out.

The California-based company reported a net loss of $268m (�183m) compared with a profit of $798m in the same period last year.

Cisco, like its rivals Lucent and Nortel, has suffered as businesses and telecoms companies have cut back on hardware spending.

'Good quarter'

"Given the very challenging economic and capital spending environment, we were pleased to deliver a solid quarter with good linearity, sequential revenue growth and profitable market share gains," said John Chambers, Cisco's chief executive.

Sales for the quarter that ended in October fell 32% to $4.4bn, but were also slightly ahead of forecasts.

Cisco said in August first-quarter sales would be flat to down 5 percent from the fourth quarter of $4.3bn.

Chief Executive John Chamber said last month he was "very comfortable" with Wall Street's estimates.

Shares moved up 4% to $18.65 in after-hours trading after making gains during the day.