Business VoIP

The chief executive officer of a San Jose, California-based networking equipment giant that’s viewed by many as a bellwether for the entire technology market said today that the industry now is poised to see the “second phase” of Internet expansion.

 

During a guest appearance on CNBC’s “Squawk Box” pre-market show this morning, Cisco Systems, Inc. Chief Executive Officer John Chambers (News - Alert) said that the “new” Internet will feature “visual networking, Wikis, blogs and telepresence.”

 

Echoing what many market researchers say about the future of business communications, Chambers told show hosts Becky Quick, Joe Kernen and special guest Sol Trujillo – chief executive officer of Australia-based Telstra (News - Alert) Corp. Ltd. – that “communications of the future combine data and voice.”

The comments come on the heels of Chambers’ widely anticipated report on his company’s earnings.

 

Cisco (News - Alert) announced that it netted $10.4 billion for the fourth quarter of 2008 – the first time it’s eclipsed the $10 billion mark – and $39.5 billion the fiscal year just passed. The figures mark 10 and 13 percent year-over-year increases, respectively, according to the company.

 

Addressing the media, investors and tech insiders in a conference call – including some hoping for signs of what the nation’s economy in 2009 may look like, as many call for what they describe as a looming nationwide recession – Chambers said the company “delivered solid quarterly and annual results as network-enabled business process changes and productivity increases gain traction on a global basis.”

 

“The market is clearly in transition, and we will use this time as an opportunity to expand our share of customer spend and to aggressively move into market adjacencies,” Chambers said.

 

The words come amid wide speculation about the company’s finances, following two consecutive quarters in which Cisco’s rolling operating and net margins have dropped, according to insiders.

 

Cisco’s investors, in particular, have been braced for bad news, disconcerted by signs that companies are spending less on technology at a difficult time. Cisco shares have fallen by 18 percent this year, sources say.

 

Cisco, which sells routers and switches that direct Web traffic, said its profit for the fiscal fourth quarter ended July 26 rose to $2.0 billion, or 33 cents a share, from $1.9 billion, or 31 cents a share, in the same quarter one year ago.

 

Officials are hailing the results as a calming voice amid a slower U.S. economy.

 

According to Reuters and analysts interviewed by the news service, Cisco’s claim that it was comfortable with a long-term revenue growth target of 12 to 17 percent is a positive sign.

  

“It was a solid clean result,” according to Mark McKechnie, an analyst at American Technology (News - Alert) Research that Reuters interviewed.

 

Chambers is also looking for a clean result from Arizona Sen. John McCain, for whom he is serving as one of five national co-chairmen.

 

“We do a pretty good job of picking winners at Cisco, and I think he (McCain) will make an excellent president,” said Chambers, who hastened to add that in his position as co-chairman, he speaks for his own political views and not for those of Cisco.

 

Asked by Kernen whether one candidate had a more favorable tax plan for U.S. corporations, Chambers said that with a slower economy now, he would prefer a plan that focuses on bolstering the standard of living and productivity, adding that an income tax increase for corporations “should be taken off the shelf for a year or two.”

 

Chambers said he would prefer a 10 percent cut in the corporate tax rate, from 35 to 25 percent.