Cisco profit bolstered by new business divisions in security, IoT, cloud

Cisco has reported a better-than-expected quarterly profit, driven by gains from its newer businesses such as security, which more than offset the declines in its traditional switches and routers business.

The world's largest network gear maker forecast second-quarter adjusted profit between 58 US cents to 60 US cents per share, largely above analysts' estimate of 58 US cents, according to Thomson Reuters.

The company's shares rose 3.2 percent to US$35.20 aftermarket.

Revenue from Cisco's security business — which offers firewall protection and breach detection systems — rose 8 percent to US$585 million.

Cisco has shifted its focus to newer high-growth areas such as security, internet of things and cloud computing like other legacy technology companies.

The company's net income rose to US$2.39 billion, or 48 US cents per share, in the first quarter ended 28 October, from US$2.32 billion, or 46 US cents per share, a year earlier.

Excluding items, the company earned 61 US cents per share. Revenue fell 1.7 percent to US$12.14 billion.

Analysts on average had expected Cisco to report a profit of 60 US cents per share on revenue of US$12.11 billion.

Reporting by Laharee Chatterjee in Bengaluru. Editing by Shounak Dasgupta