Cisco Systems Inc's quarterly results beat expectations on what CEO John Chambers called a dramatic business acceleration as customers resumed upgrading networks to handle growing Internet traffic.

Cisco, which sells routers, switches, and other equipment that support wireless and Internet use, said on Wednesday that revenue for its fiscal second quarter ended January 23 rose 8 percent from a year earlier to $9.8 billion.

It was Cisco's first year-on-year revenue growth since the quarter ended October 2008. Analysts, on average, had expected revenue of $9.4 billion, according to Thomson Reuters I/B/E/S.

During the quarter we saw dramatic across-the-board acceleration and sequential improvement in our business in almost all areas, Chief Executive John Chambers said in a statement.

Profit rose to $1.9 billion, or 32 cents a share, from $1.5 billion, or 26 cents a share, in the year-ago quarter, it said. Earnings excluding items rose to 40 cents from 32 cents, compared with Wall Street's average forecast of 35 cents.

Cisco is one of the first major technology companies to report results that include much of January 2010. Its performance and outlook are often an early indicator for the rest of the technology sector, especially in enterprise spending.

The results come a year after Chambers gave a weaker-than-expected revenue forecast and announced job cuts, stoking fears of a 2001-style freeze in technology spending.

Yet, results over the past year have shown cutbacks were not so drastic as companies were not as over-invested in network equipment as they were a decade ago.

While phone service providers and large corporations did indeed trim spending in 2009, many have recently resumed spending as the popularity of smartphones like Apple Inc's iPhone and increasing use of online video continue driving Internet traffic.

Cisco shares rose 1.3 percent to $23.36 in extended trading, after ending 0.2 percent higher at $23.07 on Nasdaq. The company is due to announce its outlook for the current quarter in a conference call that is underway. (Reporting by Ritsuko Ando; Editing by Richard Chang)

Cisco Systems