Cisco's (News - Alert) aggressive restructuring plan may just work out. Shares of the networking equipment giant rose in late trading on Wednesday after the company posted better-than-expected first quarter results and unveiled a lofty second quarter forecast.

Revenue climbed to $11.3 billion in the three months ending in October, up 4.7 percent from the previous year's Q1. Sales easily exceeded analysts' expectations of $11.03 billion as well as the company's own outlook of between $10.86 billion and $11.18 billion, according to Barron's. Cisco also posted net income of $1.8 billion, or 33 cents per share.

Sales for the current quarter should increase between 7 percent and 8 percent and earnings should fall between 42 and 44 cents per share, Chief Executive John Chambers (News - Alert) noted in a conference call. Cisco also beat Wall Street's estimates on gross margin, a measure of success that has fallen over the last five years that Chambers is intent on turning around.

“Everyone in the company is now focused on gross margins,” Chambers told Bloomberg. “Our sales people now get paid for the first time – you could probably say we should have done it earlier – on total profit contribution for their regions.”

The strong quarterly results come six months after Cisco lowered its growth expectations and announced a massive restructuring effort. After acknowledging that Cisco had fallen of track, Chambers in April eliminated the Flip video camera unit, laid off around 6,500 employees and overhauled the company's management structure.

Long been criticized for spreading itself too thin by trying to compete in dozens of markets, Cisco also refocused on selling in five core areas, including its switching and routing units, which have been the company's chief money makers for years.

“We are going to be tough on our competitors, whether they’re Juniper or HP,” Chambers added to Bloomberg (News - Alert). “It’s something I think we were a little too gentle on in the past. We are going to lead in the switching market.”

To remain viable, Cisco will also need to respond to increased competition from foreign rivals like China's Huawei (News - Alert) Technologies – a company that Chambers often refers to as a “very tough” competitor.

Cisco shares rose as much as 4 percent in after-hours trading to $18.25. Shares stood at just $16.35 in September when the company lowered its long-term sales projections.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell