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Cisco Systems announced after the bell Wednesday that profits jumped 37% in the company's fiscal first-quarter, as sales in emerging markets took off. Net income increased to $2.21 billion ($0.35/share) compared to $1.61 billion ($0.26/share) a year ago. Excluding certain costs, profits came in at $0.40/share, beating analysts' forecasts of $0.37/share. Revenue increased 17% to $9.55 billion, which was in-line with estimates. Cisco secured orders in emerging markets like Serbia, where businesses and governments are looking to build a more solid infrastructure. "If this market transition continues to unfold as we expect, it has the potential to power Cisco's and the industry's growth for many years to come," CEO John Chambers said. In the company's conference call, Chambers cautioned business spending on networking equipment may hit soon a "bumpy" period as companies hurt by housing softness and credit-market weakness cut their tech budgets (full transcript). Emerging markets make up 10% of the company's revenue. For the coming quarter, Cisco projected revenue of $9.79 billion, slightly missing analyst estimates of $9.81 billion. Shares of the company were down 3.9% in Wednesday's session, and lost another 9.1% on the report in after-hours trading, as investors seemed to be dissapointed by the modest beat. "Cisco is such an execution machine that everybody expects them to come out and beat the top line a little bit," Stifel Nicolaus analyst Sanjiv Wadhwani said. "Overall, it is good performance, but maybe slightly below what people have been used to."

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Source: Cisco Beats Estimates, But Shares Drop