Networking company Cisco Systems Inc. impressed shareholders Wednesday after reporting better-than-expected fiscal first-quarter revenue, driven by strong growth in its newer businesses such as applications and security.

The technology giant posted a net income of $2.4 billion, or 48 cents per share. Profit after certain costs such as stock compensation came in at 61 cents per share on revenue of $12.14 billion, down 2 percent from the same period a year ago. Still, that was slightly better than Wall Street’s forecasted earnings of 60 cents a share on $12.11 billion in revenue.

Shareholders responded positively, as Cisco’s share price ticked up 3 percent in after-hours trading. Update: In morning trading Thursday, shares were up almost 6 percent on a strong day for the overall market.

“With the Jan-Q outlook incorporating a crossover to positive Y/Y revenue growth, we expect investors to become more constructive on the stock’s longer-term appreciation potential,” Barclays Research analyst Mark Moskowitz wrote in a note to clients.

Cisco’s revenue breakdown shows how the company’s shift away from its traditional hardware sales to a software subscription-based business is accelerating, though it hasn’t yet produced overall revenue growth. In recent years, the company has switched its focus to higher-growth areas such as cloud computing, the “internet of things” and security, and in line with that focus, it now breaks out its revenue in four categories: infrastructure platforms, applications, security services and other.

Infrastructure platforms, which includes the company’s core switches and routers hardware business, saw revenue fall 4 percent, to $6.9 billion. The “other” segment was also down 16 percent, to $296 million. However, these declines were offset by strong growth in Cisco’s newer businesses. Applications revenue rose 6 percent, to $1.2 billion, while security revenue grew by 8 percent, to $585 million.

Cisco Chief Executive Officer Chuck Robbins (pictured) seized on the strong growth in its newer businesses, saying it was evidence of the “continued progress” the company was making with its strategy.

“The network has never been more critical to business success,” Robbins said. “Cisco is delivering more insights and intelligence as we help our customers build highly secure, intelligent platforms for digital business.”

Despite the positive results and shareholder’s enthusiasm, Holger Mueller, principal analyst and vice president of Constellation Research Inc., said Cisco still has to show that its strategic shift will provide longer-term benefits.

“It’s good to see Cisco’s strategic bets picking up some steam,” Mueller said. “But it needs continuous positioning and execution as well as understanding and spending by customers. The next quarters will show if Cisco can deliver on its guidance, and if the growth can outpace the expected slowdown in hardware and its bread-and-butter networking gear.”

Cisco’s guidance for the next quarter suggests it can continue to deliver. The company said it expects second-quarter revenue to grow by between 1 percent and 3 percent year-over-year, with an adjusted profit of 58 cents to 60 cents per share, outpacing Wall Street’s forecast of 58 cents a share on $11.7 billion in revenue.

Image: Robert Hof