Cisco's results are often seen as an indicator for the technology sector.

It has a wide base of customers in corporate America which makes it a perfect benchmark for the financial health of American companies.

Cisco's chief executive John Chambers said: "In what is probably the most challenging environment the information technology industry has even faced, we are pleased with our results in posting one of the best pro forma quarters in our history."

"From a global ceo and government leader perspective, we remain in a 'show-me' economy," he cautioned.

Better than expected

The networking giant earned $991m (�603m) in the second quarter, up sharply from $660m a year ago.

The results beat analyst expectations.

Sales slipped 2.1% to $4.7bn amid the technology slowdown.

In what is probably the most challenging environment the information technology industry has even faced, we are pleased with our results in posting one of the best pro forma quarters in our history chief executive officer John Chambers

Cisco's equipment produces the devices that link company computer networks together, and allow data and voice traffic to travel through telephone networks.

Once the star of the high-tech sector - and briefly the world's most valuable company - Cisco crashed to earth when the dot.com bubble burst.

Cisco has since drastically cut costs and focused more attention on other business opportunities.

Two years ago, it cut 8,500 jobs.

Cisco released its results after Wall Street closed.

Shares lost 28 cents to close at $13.20 in Tuesday trading on the Nasdaq.

Spending by corporate customers, which makes up about 80% of Cisco's sales, has suffered in the global economic slowdown.

Demand in the sluggish telecom sector, which accounts for the rest of Cisco's sales, has also slumped dramatically over the past two years.