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(CIOZone) By Mel Duvall
The economic recovery has appeared a bit anemic of late. Positive economic news on one front seems to be met with less encouraging news on the next. Poor showings on the job market and the housing front, in particular, are troubling signs that the recovery may not be at hand.
Providing a bit of sunshine on this cloudy picture is John Chambers, chief executive officer of networking equipment manufacturer Cisco Systems. In reporting the company’s second quarter results last week, Chambers indicated that businesses are opening their wallets and spending once again on technology and services.
In fact, in a conference call with analysts, Chambers went so far as to say: “This is one of the most robust positive turnarounds I’ve seen in my career.” And Chambers has seen a few doozies in his time, including the dot com crash.
The San Jose-based networking giant posted a 23% increase in quarterly profit and an 8% gain in revenue. That was a very encouraging turnaround from the last four quarters in which it experienced declining sales and profits. Providing more optimism is the fact that Cisco forecast revenue would rise 23% to 26% in the current quarter from the same period a year ago.
Chambers also said Cisco would be very aggressive in the coming year and expects to add between 2,000 and 3,000 workers over the next quarter.
On their own, Cisco’s results would not be enough to declare a trend, but fortunately, there have been a number of other positive signs on the technology front. Intel, for example, said its division which sells chip for server systems saw a 42% increase in the last quarter. Sybase, which sells data base software, saw a 34% jump in profit in the last quarter. Storage systems leader EMC saw a 58% leap in earnings.
EMC Chief Executive Joe Tucci recently told the Wall Street Journal that the company also expected to increase its staffing this year both in the United States and internationally to meet forecasted growth. In addition the company plans to boost its spending on research and development by 20% in 2010 to $1.95 billion.
To be sure there are no guarantees that the economy will rebound strongly this year, or that some other financial crisis won’t derail the recovery. But at least the words from the technology chiefs are encouraging – corporations are once again spending and the tech companies are ramping up their own hiring and research plans to meet the expected surge.
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