Companies have been splashing out on upgrading their equipment

Net income rose 28% to $1.6bn (�840m) during the period compared with $1.3bn in the same period last year. Before one-offs, Cisco's profit was �1.9bn.

Sales rose 25% to $8.2bn, driven by businesses upgrading their equipment to handle increased internet traffic.

Cable set-top box maker Scientific Atlanta, which Cisco bought in February, also boosted sales by $584m.

Shares in the group rose 3.6% to $26 on the news. Its shares now stand more that 47% higher than they were at the start of the year.

We delivered record revenue, net income and earnings per share Dennis Powell, Cisco Systems Check Cisco's shares

"Revenues were better than most people were expecting," said RBC Capital Markets analyst Mark Sue.

Most forecasts had predicted that profits before exceptional items would come in at $1.8bn.

"We are very pleased with our excellent performance for the first quarter," said Cisco chief financial officer Dennis Powell, Cisco chief financial officer.

"We delivered record revenue, net income and earnings per share, with strong operating cash flows of over $2bn for the third quarter in a row."

As well as increased demand for powerful routers, switches and network upgrades, Cisco also won a number of significant contracts during its first quarter.

KT was one firm to agree a deal - it will be using Cisco technology to provide services like video on demand. Verizon Communications also signed a contract.