Chuck Robbins, CEO & President of Cisco, speaks at the Squawk Box at WEF in Davos, Switzerland on January 18, 2023.
Adam Kalika | CNBC
Cisco shares fell as much as 13% in extended trading on Wednesday after the networking hardware maker released a pooled forecast for the current quarter and full fiscal year.
Here’s how the company fared, compared to the consensus among analysts surveyed by LSEG, formerly Refinitiv:
- Revenue: $1.11 per share, adjusted, vs. $1.03 per share expected
- Revenue: $14.67 billion and expected $14.61 billion
Revenue rose 7.6% in the fiscal first quarter ended Oct. 28. Report. Net income was $3.64 billion, or 89 cents per share, up from $2.67 billion, or 65 cents per share, in the year-ago quarter.
In the quarter, new product orders declined, mainly because customers were busy installing and implementing products after strong deliveries in the previous three quarters, Cisco said in the report.
“Our customers and our sales organizations have been very clear with us over the last 90 days that this is the issue,” Cisco CEO Chuck Robbins said in a conference call with analysts. But he said sales cycles will be longer than usual.
The company estimates that one or two quarters of shipped products are waiting to be implemented.
As for guidance, Cisco called for adjusted earnings per share of 82 cents to 84 cents, up from $12.6 billion in the fiscal second quarter, to $12.8 billion. This represents a 6.6% revenue decline. Analysts polled by LSEG had expected adjusted earnings of 99 cents per share on $14.19 billion.
Cisco lowered its full-year forecast for revenue but raised its earnings outlook. The company now sees adjusted earnings per share of $3.87 to $3.93 on revenue of $53.8 billion to $55.0 billion. For August, it expects adjusted earnings per share of $3.19 to $3.32 and revenue of $57.0 billion to $58.2 billion. Analysts polled by Refinitiv expected adjusted earnings of $4.05 per share and revenue of $57.76 billion.
During the quarter Cisco announced plans to buy data analytics software maker Splunk for $28 billion.
Cisco hopes to win $1 billion worth of orders for artificial intelligence infrastructure from cloud providers by fiscal year 2025, Robbins said. Cisco has been flexible and able to regain its footing when working with cloud providers, he said.
“When you look at the AI infrastructure that’s primarily supported right now, They wants to move to a standard broad-based technology like Ethernet that can actually be multi-sourced, Nvidia, a popular graphics processing unit for training and running AI models, sells Mellanox switches mapped to the InfiniBand networking standard.
Despite the after-hours move, Cisco stock is up 12% so far this year, trailing the S&P 500 index, which has gained 17% over the same period.
See: Cisco Revenue on Deck: Here’s What to Watch
