CISCO CHIEF PAINTS ROSY OUTLOOK AS FIRM BEATS FORECAST

       Cisco Systems'John Chanmbers, one of the first technology leaders to herald the recession two years ago, said he now sees a global economic recovery, fuelling a rebound in his company's sales this quarter.
       "The numbers are indicating us being in the early, initial phase of a recovery - with the US leading the way," Chambers said yesterday, following the release of Cisco's fiscal first-quarter results.
       "The numbers for US enterprise orders were dramatic, going from a minus 20 per cent order rate a quarter ago to plus 10 per cent. That's beyond a tipping point."
       Sales will grow 1 per cent to 4 per cent in the second quarter from a year earlier, Cisco said.
       That equates to at least US$9.18 billion (Bt327 billion), toopping the $8.96-billion average estimate of analysts surveyed by Bloomberg.
       The rebound follows four straight quarters of declines.
       After putting off orders during the recession, customers are resuming spending on networking gear to handle growing traffic.
       Cisco, the biggest maker of network equipment, also is benefiting from cost reductions over the past year, including a hiring freeze and travel cutbacks.
       As demand bounces back, Cisco is stepping up investments and acquisitions.
       "Spending on data-networking gear is a tide that will lift all boats," said John Krause, and Appleton, Wisconsin-based analyst for Thrivent Financial for Lutherans, which owned 4.4 million shares as of September 30, according to Bloiomberg data._We're likely to see this improvement continue on into 2010."
       Cisco, based in San Jose, California, rose 64 cents, or 2.8 per cent, to $23.93 on Thursday in Nasdaq Stock Market trading. The shares have gained 47 per cent this year.
       In November 2007, Chambers reported a "drematic" decline in sales to automobile and financial companies. The remarks triggered the biggest technology sell-off in more than four years and foreshadowed the recession.
       Cisco has announced four acquisitions and a joint venture since October 1, living up to a pledge by Chambers last month to get more aggressive in mergers and partnerships.
       One of those deals, the acquisition of Tandberg for about $3 billion, has yet to win shareholder support.
       A group of investors owning more than 24 per cent of Tandberg's shares has pressed Cisco for a higher bid.
       By Norwegian law, 90 per cent of a company's share-holders must approve the transaction.
       "The odds are very high we will find a way to make this work," Chambers, 60,said.
       "It's in our interest and Tandberg's interest to do so. We think we paid a fair price, and we will play out the hand appropriately. If we can't get a fair price, we've walked from several deals already this year."
       Cisco's net income fell 19 per cent to $1.79 billion, or 30 cents a share, in the first quarter, which ended on October 24.
       The US economy grew about 3.5 per cent last quarter, re-emerging from the longest recession since World War II. As demand recovers, companies are stepping up investments in their networks.
       AT&T, the largest US phone company, expects to spend at least$5 billion on capital equipment in the final three months of 2009.
       In September, Goldman Sachs Group predicted that worldwide spending on technology products will decline 8 per cent this year.

       As demand bounces back, Cisco is stepping up investments and acquisitions.