17 Aug 2012

Dividend raised by Cisco

8:00 am on 17 August 2012

Cisco, the world's largest maker of networking equipment, has increased its dividend by 75%.

The company said cost cutting helped fourth quarter net income to rise to $US1.9 billion from $US1.2 billion a year ago, on revenue up 4.4% to $US11.7 billion, despite difficulties in Europe.

Cisco also said it would raise its dividend by 75% to 14 cents per share.

Shares rose 5% to $18.23 in after-hours trading on the news.

Chief executive John Chambers forecast revenue growth of between 2% - 4% in the next quarter, but warned of continuing uncertainty in Europe, which was creating an environment in which it was difficult to clinch business deals.

"That's probably going to get tougher before it gets better and that might last for a good little while," he said.

As a result, he said, many customers continue to anticipate a challenging next 12 months on a global basis and would therefore remain conservative both in their IT expenditures and in their hiring.

The BBC reports Cisco is undergoing a restructuring programme that aims to cut expenses by about $US1 billion. Last month it announced it would cut 1300 jobs - about 2% of its workforce. Last year, the company shed 10,000 postions.