Cisco CEO sees economy growing by second half
LAS VEGAS (Reuters) - Cisco Systems Inc (CSCO.O) Chief Executive John Chambers said on Friday that the U.S. economy may start to grow again in the second half of 2009 but that his opinion should not be read as a comment on the network equipment maker's current quarter.
"I think it will be by the second half of this year," said Chambers toward the end of his keynote presentation at the Consumer Electronics show in Las Vegas after asking the audience when it saw gross domestic product resuming growth.
However, after seeing a less than decisive show of hands among the audience in response to his question about whether GDP growth would resume this year or next year Chambers said "That's pretty typical of what my customers are saying."
He said he wanted to make the point that nobody really knows even though everybody, including himself, has opinions about how long it would take the recession to end.
Cisco is the world's largest maker of network equipment and is often seen as a bellwether in the technology sector.
But the executive had declined to comment on the economy at two earlier events at the annual gadget showcase except to say that Cisco would use the downturn to its advantage as it looks to break into new markets such as consumer electronics.
Chambers has often said that Cisco's long-term growth prospects are intact due to expected growth in Internet traffic, although the latest downturn has turned out to be longer and deeper than initially thought.
Net profit for Cisco's fiscal first quarter ended October 24 was $2.2 billion, or 37 cents a share, compared with $2.2 billion, or 35 cents a share, in the year-ago quarter.
But it has forecast revenue will fall 5 percent to 10 percent year-on-year in the current quarter ending later this month and made plans to cut spending for the full fiscal year by over $1 billion from its original budget.
Cisco shares had closed down 84 cents or almost 5 percent on Nasdaq before Chambers made the comments.
(Additional reporting by Ritsuko Ando in New York Editing by Carol Bishopric)
