The company's shares rose as high as $24.83 in heavy trading, eclipsing the two-and-a-half year high price of $24.78 set last month. With more than two hours of trading left in the regular session, the number of shares traded had nearly matched the stock's daily average volume.
The number one maker of networking equipment is expected to report earnings per share of 29 cents for its fiscal first quarter ended in October, up from 25 cents a year earlier, according to a survey of analysts by Thomson Financial.
Sales are seen rising 21% to $7.9 billion, helped by Cisco's acquisition of Scientific-Atlanta, whose gear lets cable providers offer high-speed Internet service.
In August, Cisco Chief Financial Officer Dennis Powell forecast quarterly sales growth between 19% and 21 %, including sales from Scientific-Atlanta, which Cisco acquired in April. Powell also said then that costs for stock options and merger-related expenses would cut earning per share between 4 cents and 6 cents.
Cisco is benefiting from the explosive growth of Internet traffic being driven by more consumers downloading digital pictures and videos. For the quarter ended in July, sales of Cisco's Internet routers rose 12%, while sales of all gear to telecom companies climbed 18%.
"Video on the network holds the potential to drive network traffic growth from (a range of) 70-100% per year to 200-300%," according to a note published Friday, Nov. 3, by the brokerage arm of Goldman Sachs, which rates Cisco shares a buy.
Corporate customers are also upgrading their networks to add features, boost security and shift more of their long-distance communication from traditional phone networks to the Internet.
Cisco shares have risen more than 40% this year and are trading near their highest level since April 2004. Nearly all of the gain has come since August, when Cisco executives forecast sales growth for the fiscal year ending in July 2007 would be in the range of 15-20%, including Scientific-Atlanta.