Nov. 4--Cisco Systems CEO John Chambers, buoyed by better than expected quarterly revenue and profits, became the latest high-tech chief to point to an economic rebound, saying growth finally appears to be nosing in an upward trajectory.

"The initial phase of recovery is well underway," Chambers said Wednesday during a conference call with analysts.

But Cisco's first-quarter financial picture reflected the grim reality of the drawn-out recession. Revenue and profits fell from the same period a year ago, although they both beat Wall Street's diminished expectations. The San Jose networking giant said profits in the first quarter were $1.8 billion, or 30 cents a share, a 19 percent drop from $2.2 billion, or 37 cents a share for the same period a year ago. Revenue for the quarter, which ended Oct. 24, was $9 billion, a 13 percent slip from the year-ago quarter.

The company's revenue picture, though, was better than the 15 to 17 percent decline it had forecast this summer. Excluding one-time expenses, Cisco pulled in profits of 36 cents a share. Analysts polled by Thomson Reuters had forecast a profit of 31 cents a share on sales of $8.75 billion.

Because Cisco sells high-priced technology to large companies around the globe, it is able to gauge how executives view their economic health. "People listen to him," said Broadpoint AmTech analyst Mark McKechnie. "He's been through enough economic cycles."

Chambers also predicted sales growth

for the first time in a year, saying it would be up 1 to 4 percent for the current quarter, but he held off giving details of how he sees next year unfolding.

"It was slightly better than what we were looking for," said Bill Choi, an analyst at Jefferies & Co. "No one is sticking their neck out and talking about 2010 yet. Investors shouldn't read too much into the fact that the Cisco CEO is not able to give much color on 2010. Even a company of Cisco's breadth isn't ready to talk about that yet."

Cisco has shown confidence in a rebounding economy by going on a spending spree. Just last month, it announced plans to buy Starent Networks, a maker of equipment for wireless carriers, for $2.9 billion, and dished out another $3 billion to merge with Norway-based Tandberg. It also announced a $183 million deal to acquire Web-security firm ScanSafe. Even as the downturn has caused the company to slash thousands of jobs, Cisco is aggressively pivoting into new markets, particularly in computer servers, where it is going head-to-head with erstwhile partners Hewlett-Packard and IBM, and consumer gadgets.

Chambers said the company's third quarter "felt like the bottom" and called its fourth quarter the "tipping" point for the economic turn-around.

"The recovery is now occurring," he said. "I believe Q1 was a positive proof point."

Chambers, though, said uncertainties remained, such as whether the economy will continue to gain steam and if hiring will return to pre-recession levels.

"If we get surprised, and there is always a possibility we might, we will adjust," he said. "It's important expectations do not get ahead of realities."

The company also said its board of directors authorized up to $10 billion in additional share repurchases, bringing Cisco's outstanding repurchasing program to about $13.1 billion.

In after-hours trading, Cisco shares edged up 68 cents, or 2.92 percent, to $23.93. They closed regular trading at $23.29, up 38 cents or 1.66 percent.

Contact John Boudreau at 408-278-3496.

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