Cisco Systems, the world's largest maker of equipment that directs internet traffic, has reported a 27% fall in second-quarter profits. Sales, however, rose during the period and company President and Chief Executive John Chambers voiced optimism that "the global economy is improving".
Cisco shares fell during after-hours trading in New York as the results were worse than some analysts had forecast.
That may hurt rivals as investors see the company as an industry benchmark.
Better outlook
Net income during the three months ending 24 January was $724m (�393.8m; 577m euros), compared with $991m the previous year.
The drop was mainly down to a $567m accounting charge that relates to an earlier acquisition.
Sales painted a happier picture, climbing 15% to $5.4bn, the highest level in three years. They gained 5.8% from the previous quarter.
Analysts said that the increase in revenues might point to a pick up in corporate spending that would bode well for the US economic recovery.
Cisco makes the routers, switches and other data networking products are used to direct traffic through the internet.
Its customers include corporations, educational institutions, and governments.
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