Cisco to keep strategy even in case of recession

LAS VEGAS (Reuters) - John Chambers, chief executive of Cisco Systems Inc (CSCO.O) said on Monday the network equipment maker would not change its business plans even if the U.S. economy is hit by a recession, as it is focused on long-term strategy.

He declined to comment on demand on the current quarter but repeated Cisco's long-term, annual revenue growth target.

Chambers was asked about concerns that a recession could slow technology spending and Cisco's push into consumer technologies that support services such as Web-based video delivery.

"I don't make any decisions on the next quarter or the next year. I make my decisions three to five years out so I do not adjust my strategy based on what's spending going to be next quarter or three quarters. I make my decisions on three to five years," Chambers told reporters at a Cisco reception at the sidelines of the Consumer Electronics Show.

"My view is that if we execute well as a company, 12 to 17 percent growth is foreseeable for the future. Will there be times we go above it? Probably. Will there be times we go below it? Probably," he said.

"We think 12 to 17 percent growth is very doable if our vision, our differentiation strategy and execution is right. That's pretty strong for a company that's $40 billion in sales."

Cisco's shares have fallen 20 percent since November 7 when it posted its earnings for the fiscal first quarter ended in October and Chambers said the company was hit by dramatic decreases in orders from U.S. banks and that he expected U.S. enterprise demand to remain "lumpy" for a while.

Enterprise customers represent about 13 percent of Cisco revenue. The company has been expanding into video conferencing and new Web-based software through acquisitions of small start-ups.

It owns cable set-top box maker Scientific Atlanta and has also been expanding its overseas business, investing aggressively in fast-growing markets like China and India.

Many network upgrades by top telecom companies also involve equipment made by Cisco.

Analysts have said they expect telecom and cable providers to keep buying more Cisco products to keep up with growing Internet traffic, due in part to the popularity of Web-based video and music services.

(Reporting by Sinead Carew and Daisuke Wakabayashi; Editing by Valerie Lee)