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UPDATE 2-Cisco's Chambers says will stay on 3-5 more yrs
May 18, 2009 / 6:13 PM / 9 years ago

UPDATE 2-Cisco's Chambers says will stay on 3-5 more yrs

* CEO gives upbeat view on Cisco expansion potential

* Focus on U.S. market, followed by China, India, Mexico

* Eyes teaching, not politics, after retiring from Cisco

* Shares up 4.8 pct (Adds past comments, share move)

NEW YORK, May 18 (Reuters) - Cisco Systems Inc (CSCO.O) Chief Executive John Chambers said on Monday that he would stay in his role for at least another three to five years, reassuring investors there would be no imminent change in leadership amid a global economic slowdown.

Asked at a JP Morgan technology conference about his future plans -- for example, if he would move into politics -- the 59-year-old head of the biggest U.S. network equipment maker said he was more likely to teach.

“I love what I do. I‘m going to retire here at Cisco and after that I will teach,” he said. “I intend to stay at Cisco for probably a minimum of three to five more years, assuming I can earn the shareholders’ trust, our employees’ trust, our customers’ trust, and assuming my health holds up.”

Cisco shares rose 4.8 percent to $18.78 in afternoon trade, helped also by Chambers’ upbeat view on the company’s expansion potential.

The question of Chambers’ retirement and the succession for the CEO role is a sensitive one at Cisco, particularly because there does not appear to be a consensus on who could be the next leader.

Since Chambers took the CEO role in January 1995, Cisco has grown from a company with $1.2 billion in annual revenue to nearly $40 billion, as the expansion of the Internet fueled demand for routers and switches that direct Web traffic.

Chambers told Reuters a year ago that the CEO role will be less hierarchical, and more collaborative, with several executives sharing ideas. He has also recently said he wants to pay shareholders a dividend before he retires, although he has not clearly stated when either move would come.

Chambers also told the conference that Cisco would continue expanding from network equipment to new businesses utilizing new video technology and Web collaboration, despite the current economic downturn.

“We have a playbook that handles market downturns,” he said. “Every time there’s been one, in ‘93, ‘97, 2001, and 2003, we emerged out of the market with much higher market share, much larger percentage of the total industry’s market cap that we were addressing, and movement into new market adjacencies. We are doing the same thing at this time.”

Cisco has forecast revenue in the current quarter falling 17 percent to 20 percent from a year earlier, although the company has said it is aiming for revenue growth of 12 to 17 percent a year in the long term, under normal economic conditions.

Chambers said Cisco’s primary focus was on the United States, a market he has repeatedly said would be the first to emerge from the current economic downturn. He added he was also focusing on China, India and Mexico. (Reporting by Ritsuko Ando; Editing by Maureen Bavdek, Gary Hill)

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