Cisco Systems is often seen as a bellwether for the technology sector’s economic fortunes, so while its first-quarter earnings were down, its profits exceeded Wall Street’s expectations.

Cisco CEO John Chambers was out in front two years ago in predicting the downturn in the economy, but Chambers is upbeat about the immediate future, with customers purchasing more network equipment such as routers and switches.

“Building off what we saw as a clear tipping point in Q4, our Q1 results continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times,” Chambers said . “We view the improving economic outlook, combined with solid execution on our growth strategy, as creating unparalleled opportunity to drive more value into the core of the network. Simply said, we believe that key market transitions across collaboration, virtualization and video will drive productivity and growth in network loads for the next decade and are evolving even faster than expected."

Cisco’s earnings for the first quarter were down to $1.8 billion, or 30 cents per share, from $2.2 billion, or 37 cents per share, in the same quarter a year ago.

Earnings, excluding one-time items, were 36 cents per share, which exceeded the average forecast by analysts of 31 cents, according to FactSet Research Systems.

Cisco’s quarterly revenue was $9 billion, which was down from $10.3 billion a year ago.

Cisco forecast its second-quarter revenue would increase 1 percent to 4 percent from a year ago, and increase 2 percent to 5 percent compared with the first quarter.

Last month, Cisco announced a deal to buy video conferencing company Tandberg for $3 billion, as well as a $2.9 billion deal for wireless equipment vendor Starent Networks.