Cisco Systems Inc. said on Tuesday its quarterly profit rose 34 percent as businesses and telephone companies bought more network equipment to keep up with increasing Internet traffic.

While Cisco's revenue and earnings excluding special items topped average Wall Street forecasts, the company's shares fell 3 percent in extended trading as some analysts said investors had been looking for a bigger beat.

"I might have looked for a little more earnings contribution on that amount of revenue upside," said Tim Daubenspeck, an analyst at Pacific Crest Securities.

"Expectations are definitely going up. Some people were looking for a bigger beat."

Cisco, the world's largest maker of routers and switches that direct Internet traffic, said net income for its fiscal third quarter rose to $1.9 billion, or 30 cents a share, from $1.4 billion, or 22 cents a share, in the same quarter a year earlier.

Excluding special items, profit rose to 34 cents a share from 29 cents a share a year earlier, beating by a penny the average analyst forecast according to Reuters Estimates.

Quarterly sales rose 21 percent from a year earlier to $8.9 billion, compared with the average analyst forecast of $8.8 billion. In February, the company forecast 19 percent to 20 percent revenue growth for the third quarter.

"It was all very good. There's nothing wrong with it," said Ehud Gelblum, analyst at J.P. Morgan.

But he added: "It doesn't look like it was exciting enough to make people's numbers go up right now, but it's all in guidance and that comes on the call."

Cisco shares, which rose 2 percent ahead of the results to close at $28.36 on the Nasdaq on Tuesday, fell 3.2 percent to $27.46 in extended trading following the report.

The stock has barely risen this year due to concerns about a slower U.S. economy and views that much of Cisco's potential growth had already been priced in after a 60 percent surge in the stock price in 2006.