Cisco said rising demand underpinned its figures, as it reported net profits rose 23% to $1.2bn (�683m).

Sales were 21% higher at $5.6bn, the California based technology giant said.

"This momentum was achieved through sequential order growth across all major product categories," said Cisco president John Chambers.

Cisco said it plans to hire 1,000 new staff in sales and engineering during the remainder of 2004.

The company predicted sales in the final quarter of its financial year would rise by between 3% and 5%.

Shares fall

Cisco makes the routers, switches and other data networking products used to direct traffic through cyberspace.

Cisco said its third quarter cash flow from operations was the strongest in its history, at $2.4bn.

"Our execution was strong, with solid revenue growth, gross margins, profit generation and market share gains," said Cisco chief financial officer Dennis Powell.

But analysts and investors registered disappointment, sending Cisco's shares lower.

The stock had risen during Tuesday to finish up 63 cents higher when US stock markets closed ahead of the results.

But it then fell in electronic after hours trading as sales growth fell slightly short of analysts' expectations of $5.7bn.