Nov. 16 (Bloomberg) -- Cisco Systems Inc., the world's biggest maker of networking equipment, increased its stock buyback by as much as $10 billion after a disappointing sales forecast this month.

The amount would allow Cisco to repurchase about 6 percent of its shares outstanding, based on yesterday's closing price. The increase is twice as large as the San Jose, California-based company's last buyback boost in July.

Cisco stock has slumped 8.6 percent since Nov. 7, the day Chief Executive Officer John Chambers said declining orders from automobile and financial companies are curbing growth. His comments triggered the biggest sell-off in technology stocks in nine months the next day.

The buyback's ``timing didn't hurt,'' Standard & Poor's Ari Bensinger said in an interview. ``The company is never going to be a sexy growth story. It's going to be a dependable, stable, mid-teen-earnings growth type of company.'' The New York-based analyst advises investors to hold the stock and doesn't own it.

Cisco's shares rose 64 cents, or 2.2 percent, to $29.94 at 4 p.m. New York time in Nasdaq Stock Market trading. They have climbed 9.5 percent this year.

Chambers, 58, said fiscal second-quarter sales would climb 16 percent from a year earlier, in line with analysts' projections and Cisco's earlier estimate of 12 percent to 17 percent. First-quarter profit also met predictions, disappointing investors who anticipated faster growth.

Slackening Orders

Cisco's orders from its top 25 U.S. customers, which include eight financial-services companies and two automakers, have slowed, Chambers said last week. U.S. businesses have ``squeezed'' information-technology spending, he said.

Banks may be slashing networking budgets to cope with increasing mortgage defaults. Losses tied to home foreclosures may prompt banks, brokerages and hedge funds to cut lending by $2 trillion and lead to a ``substantial recession'' in the U.S., according to a Goldman Sachs Group Inc. report dated yesterday.

To weather the slump, Chambers is investing in emerging markets, making acquisitions and pushing into new products such as television set-top boxes. The U.S. economy is coming in for a ``soft landing,'' Chambers said yesterday.

Cisco exceeded sales predictions in seven of the past eight quarters, according to data compiled by Bloomberg. Net income climbed 37 percent to $2.21 billion, or 35 cents a share, in the quarter ended Oct. 27. Excluding a tax gain and costs such as stock-based compensation, first-quarter profit was 37 cents.

Out of 34 analysts tracked by Bloomberg, 24 advise investors to buy the shares. Eight encourage people to hold them and two recommend selling.

The increase is the largest in Cisco's buyback program in three years. The boost raises the total authorized repurchase amount to $62 billion, Cisco said today in a statement.

Cisco has never paid out dividends, choosing to buy back stock instead to return money to investors. The company will pay a dividend at the ``right point in time,'' Chambers said yesterday at a shareholders' meeting.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: November 16, 2007 16:07 EST