Markets in cold sweat over Cisco fever

This is the first time in three years that Cisco has missed profit targets, based on a survey of the opinions of major analysts.

Revenue for the second quarter, ending 27 January, was up 55 per cent year on year, but below a forecast of $7.13bn, only slightly up from last quarter's $6.52bn.

Profits excluding acquisition and other charges were 18 cents a share, narrowly missing an expected 19 cents per share estimate. This is the first time in 13 quarters Cisco has failed to exceed expectations.

John Chambers, president and CEO of Cisco Systems, blamed the slowdown on "a brief pause in the current 10-year expansion of the US economy," but remained guardedly optimistic about the future.

As the world's most popular router maker, Cisco is widely seen as a poster child for the new economy. In April 2000, it briefly overtook Microsoft and General Electric as the largest company in the world by market capitalisation.