Cisco Systems Chief Executive John Chambers gave Wall Street a set of quarterly results investors could cheer about for the first time in over a year.

While questions remain about whether recent tough measures to return the Silicon Valley giant to strong growth are enough, pressure may be easing on the long-serving CEO for now and investors pushed the company's shares as much as 10 percent higher in after-hours trading.

The world's leader in Internet networking equipment predicted revenue would increase 1 to 4 percent this quarter compared with the year ago, after posting quarterly results on Wednesday that edged past Wall Street's scaled-back expectations.

Analysts took the results and the forecast as early signs that tough measures to return the Silicon Valley giant to expansion -- including layoffs and asset sales -- were paying off.

It also signaled that demand from governments and corporations for networking might not be as bad as feared.

Some analysts had worried that Cisco (CSCO.O) would follow rivals Juniper Networks Inc (JNPR.N) and Brocade Communications Systems Inc (BRCD.O) in slashing results forecasts. In Wednesday after-hours trade, Brocade's stock was up 3.6 percent at $3.49.

"The guidance was in-line -- which was much better than feared," said Sterne Agee analyst Shaw Wu.

"There were expectations that they would guide down like most of their smaller peers."

Cisco shed about a third of its market value in 2011, punished by flagging growth and the loss of market share to aggressive rivals like Juniper.

The company, which depends on government spending for about a fifth of its revenue, said in July it would cut 15 percent of its workforce and sell a set-top box factory in Mexico as part of an effort to slash annual expenses by $1 billion. [ID:nL3E7IJ0JG]

Chambers, who in April famously said Cisco had lost its way, told analysts he foresaw "gradual improvement" in the business, while warning again of a challenges for global public sector spending in coming quarters.

That came after the company racked up better-than-expected sales, profit and margins in the fiscal fourth quarter.

"They beat a low bar. A lot of it is coming from cost cutting, which we anticipated. In that sense it's a relief," said Joanna Makris of Mizuho Securities USA.

A look at how other technology and telecoms bellwethers have fared this earnings season: r.reuters.com/nuw62s

WARNINGS APLENTY

Cisco has warned since last year that government spending cuts would include network equipment, and a deal last week to reduce the U.S. federal budget deficit could hurt the San Jose, California company's business more. [ID:nN1E777190]

Investor sentiment also worsened after rivals Juniper and Brocade slashed outlooks in recent weeks as the economic picture darkened, slamming their shares.

"It clearly was time for a fundamental change at Cisco and even though our peers are now experiencing the challenges we saw two to three quarters ahead of time, we're going to not only not slow down; we're going to accelerate," Chambers told analysts during a conference call that was more upbeat than in recent quarters.

Cisco may step up its share buybacks if the market continues to be depressed, Chief Financial Officer Frank Calderoni said. But the company has no major plans to streamline the company beyond those already announced, he told Reuters.

Cisco's first-quarter projection translated to revenue of about $10.86 billion to more than $11 billion. Analysts on average had expected revenue of about $10.95 billion in the fiscal first quarter ending October.

Fourth-quarter revenue rose to $11.2 billion from $10.8 billion a year ago.

Analysts had expected fourth-quarter revenue of $10.97 billion from Cisco, according to Thomson Reuters I/B/E/S.

Gross margins came in at 62.7 percent, dipping from 63.9 percent in the fiscal third quarter but ahead of analysts' projections for under 62 percent.

And net income fell 36.3 percent to $1.2 billion or 22 cents a share, from $1.9 billion or 33 cents a share a year earlier. Excluding certain items, it earned 40 cents share, just above the 38 cents expected on average.

Shares of Cisco rose as much as 10 percent in extended trade, before paring gains to trade at $14.64. They closed at $13.73 on Nasdaq, down 2.3 percent in a broad market decline.

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