Chief Executive John Chambers, considered a trend reader for the overall U.S. technology industry, said conditions were still challenging and that a U.S. market recovery is not in sight.

Resource Library:

"We're continuing to see our U.S. and some European customers remain cautious in their views about their own economies," he told analysts on a conference call.

His comments reined in Wall Street's optimism, and Cisco shares rose just 1 percent in extended trading after gaining as much as 3 percent immediately after the company announced its fiscal third-quarter results.

Cisco, the largest U.S. makers of routers and switches that direct Web traffic, said earnings before items for the three months ended April 26 rose to $2.3 billion, or 38 cents, from $2.1 billion, or 34 cents a share, in the year-ago period. That beat the average analyst forecast of 36 cents according to Reuters Estimates.

"Usually Cisco beats by a penny. They beat by two pennies. That was better than the norm," said Robert W. Baird & Co analyst Kenneth Muth.

Its quarterly net profit fell to 29 cents a share from 30 cents, due mainly to an acquisition-related charge of 4 cents per share.

Revenue rose 10.4 percent to $9.8 billion, compared to its previous forecast 10 percent growth.