Shares of Cisco Systems Inc. (Nasdaq: CSCO) hit a new eight-year high, vaulting $2.30 (8%) in morning trading to $29.23, on a combination of positive factors during last night's quarterly earnings report.

A little while back I commented on the suprising strength in Cisco stock. Can the stock now break $30? Cisco shares have not been above $30 since 2007.

Last night after the market closed, the networking giant reported $11.9 billion in sales for the quarter (Q2 of its fiscal year 2015), beating many analyst estimates. Pro forma earnings per share were $0.53, exceeding analyst consensus of $0.51. The company is now calling for 3 to 5% annual revenue growth, and it expects pro forma EPS of $0.51 to $0.53 in the April quarter.

Another boost for the stock came as Cisco announced a higher dividend at $0.21/share quarterly, a $0.02/share (+11%) increase from the prior four quarters. The dividend was increased by the same amount in the third fiscal quarter of 2014.

Producing more money always helps a stock. Cisco has gradually struck a more shareholder-friendly tone, perhaps watching what's happened at places like Juniper Networks (Nasdaq: JNPR), which last year came under pressure from investor activists to return more cash. Cisco is now returning more cash to shareholders. After generating $2.62 billion in free cash flow in the quarter, it returned $2.18B to shareholders in the quarter -- $1.21B via share buybacks and $974 million in dividend payments. The company now holds $32.5 billion in net cash.

Cisco executives cited a number of positive economic and technological growth factors. First of all, business in the United States was reported as strong, and spending in Europe was not as weak as feared. Cisco had strong growth in its switching segment and Nexus datacenter gear. It reported that growth in the Nexus platforms was up 11% year-over-year (y/y) and datacenter was up 40% y/y, representing 7% of overall sales.

The outlook for the coming year was the most bullish in a while, as analysts appeared surprised by the strength in Cisco's forward guidance and bookings. Total product orders for the quarter were up 5% y/y compared to up 1% for each of the three prior quarters.

More importantly, the order rate approved across all geographical segments and verticals, including the U.S., EMEA, and Emerging Markets regions and in the Global Enterprise, Commercial, and Service Provider verticals. Cisco's business over the past couple of years has been weighed down by weakness in the emerging markets and service provider segments.

That doesn't mean it's all gravy. Wall Street analysts still had some nits to pick. On the weak side, some analysts pointed to gross margins that came in about 1% below estimates (62% vs. 63%) and stagnation in the enterprise segment. However, with many networks and applications moving to the cloud, it should not be surprising that enterprise networking is weak and datacenter networking is strong.

Michael Genovese, analyst and Managing Director with MKM Partners, wrote in a research note this morning that it was a good quarter but not enough for him to change his rating on Cisco from Neutral. The reason? His fear of the impact that Software Defined Networking (SDN) and Network Functions Virtualization (NFV) might have on Cisco's business.

"We are concerned because large U.S. Enterprise customers are in the vanguard of SDN/NFV adoption and the issue could be structural/secular," said Genovese, referring to the weak enterprise sales. "On a related note, it is the U.S. Enterprise vertical where tough new competitors like Arista Networks have the most traction."