SCOTTSDALE, Ariz., Jan. 9 (UPI) -- Tech giant Cisco Systems Inc. said the prospects for growth in the economy and industry were unclear, but the company still expects to expand its market share and make several small acquisitions to fill in gaps in its product portfolio.
Cisco, which makes gear that powers the Internet, said the U.S. market is still struggling, but it has seen some strength in Europe.
Asia has had a mixed performance, with China feeling some of the stress from the U.S. economic downturn. Japan will likely see three to five years of challenging times, Cisco said.
"I'd like to say I knew where the economy is going ... but there's still limited visibility," said Cisco Chief Executive John Chambers.
"Visibility is still limited, and it is so with most of my customers," Chambers said. "Customers are saying 'We're planning conservatively and acting accordingly.'"
Cisco had seen stable product orders from June through September and that continued through the end of December, Chambers said.
"We'd been booking linearly and that continued again in November and December," Chambers said.
Linearity refers to the smoothness of incoming orders, which allows companies to run their businesses with more predictability and ultimately more profitably.
Chambers also said he sensed a palpable feeling of negativity throughout the equipment market and among customers in January 2000, but the environment now was less worrisome.
"This year is a little different. (Customers') budgets are set conservatively, with the flexibility to go up," he said.
Cisco said last month it was optimistic the downturn had ended, but ultimately time would determine whether order stability the company had seen indicated that a rebound was near.
Chambers declined to comment specifically on the health of Cisco's business in the fiscal second quarter, which ends on Jan. 26, but he expected the company to gain dramatic market share. "We're growing ahead of the market and gaining market share on almost all major competitors," Chambers said.
"We've focused the whole company on profit contribution. We used to focus on revenue growth. Now we're really focused on profits," he added.
