Cisco shares plunged by as much as 13% in extended trading on Wednesday after the global tech giant cautioned on its future earnings. The networking hardware manufacturer released results for the fiscal first quarter, which ended on October 28, revealing earnings of $1.11 per share, adjusted, versus the expected $1.03 per share. Revenue of $14.67 billion was slightly above the expected $14.61 billion, representing a 7.6% increase in revenue.
The company attributed the slowdown in new product orders to clients who are busy implementing products post strong delivery in the previous three quarters. CEO Chuck Robbins, speaking on a conference call with analysts, acknowledged the issue and noted that sales cycles remain elongated. Cisco projected adjusted earnings per share of 82 cents to 84 cents for the upcoming quarter on revenue of $12.6 billion to $12.8 billion. This implies a 6.6% decline in revenue.
While the company lowered its full-year revenue forecast, it increased its view for earnings. For the fiscal year, Cisco now expects adjusted earnings per share of $3.87 to $3.93 on revenue of $53.8 billion to $55.0 billion. In August, the company had forecasted $3.19 to $3.32 in adjusted earnings per share and $57.0 billion to $58.2 billion in revenue.
During the quarter, Cisco disclosed plans to purchase data analytics software maker Splunk for $28 billion, aiming to secure over $1 billion worth of orders for artificial-intelligence infrastructure from cloud providers in the 2025 fiscal year. Despite the after-hours drop in share price, Cisco has seen a year-to-date climb of 12%, lagging behind the S&P 500 index, which surged by 17% during the same period.
For more details on Cisco’s earnings, check out the link: Cisco Earnings on the Deck: Here’s What to Watch.
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