[R]5:30PM New York – Cisco stock fell in the after-hours trading after it issued a cautious outlook on sales in the current quarter.[/R]

Cisco (CSCO: chart) reported its second quarter sales rise of 16.5% and earnings gain of 7.2% for the period ended January 26, 2008. Cisco reported second quarter net sales of $9.8 billion, net income on a generally accepted accounting principles basis of $2.1 billion or $0.33 per share, and non-GAAP net income of $2.4 billion or $0.38 per share.

Earnings in the quarter increased to $2.1 billion from $1.9 billion and diluted earnings per share rose to 33 cents from 31 cents, an increase of 6.5%.

Cisco fell 7% in the after-hours trading after its chief executive John chambers said that January sales were below expectations and select customers are holding back spending for internet infrastructure. The comments dragged the stock in the after-hours trading to as low as $21.40, a loss of $1.68.

Net sales for the first six months of fiscal 2008 were $19.4 billion, compared with $16.6 billion for the first six months of fiscal 2007. Net income for the first six months of fiscal 2008, on a GAAP basis, was $4.3 billion or $0.68 per share, compared with $3.5 billion or $0.56 per share for the first six months of fiscal 2007. Non-GAAP net income for the first six months of fiscal 2008 was $4.9 billion or $0.78 per share, compared with $4.0 billion or $0.64 per share for the first six months of fiscal 2007.

During the second quarter of fiscal 2008, Cisco repurchased 139 million shares of common stock at an average price of $28.67 per share for an aggregate purchase price of $4.0 billion. As of January 26, 2008, Cisco had repurchased and retired 2.5 billion shares of Cisco common stock at an average price of $20.39 per share for an aggregate purchase price of approximately $50.2 billion since the inception of the stock repurchase program. The remaining authorized repurchase amount as of January 26, 2008 was $11.8 billion with no termination date.

Cisco reported stable accounting receivable as measured in days sales outstanding of 39 days and compared with 33 days at the end of the first quarter fiscal 2008 and inventory turns were 10.8 in the second quarter compared with 10.3 in the first quarter of fiscal 2008.

Cisco plans to invest $1.5 billion in the information infrastructure in the United Arab Emirates over the next five years.