Cisco Outlook Disappoints

Nov. 11, 2010
Company forecast 3%-5% increase in revenue but market expected 12.9%

Cisco shares plunged in after-hours trading on Nov. 10 after the networking giant and tech bellwether issued a disappointing revenue outlook for the current quarter.

Cisco shares fell 12.90% in extended trading to $21.33.

In a conference call with financial analysts, Cisco chief executive John Chambers said he expected revenue to grow by between 3%-5% in the current November-January quarter.

That fell well short of the expectations of Wall Street analysts who had forecast growth of 12.9% for the San Jose, California-based company considered a bellwether for technology sector spending.

"Our view is that we are going to power through what we believe to be some short-term challenges in the next several quarters," Chambers said.

"We also believe that the intermediate and long-term growth opportunities far outweigh the short-term challenges," he added. "With that in mind we plan to continue to invest in new markets and technology.

"It is realistic to return to a 12% to 17% growth goal in the not too distant future, assuming a return to a good economic growth," Chambers said.

Cisco said net profit rose eight percent in the first quarter of its fiscal year to $1.9 billion while revenue climbed 19.2% to $10.75 billion, slightly better than the $10.74 billion expected by analysts.

Cisco is a global leader in networking equipment but has added such offers as online conferencing, Internet telephony, software services, a tablet computer and a high-definition Flip digital video camera.

Copyright Agence France-Presse, 2010

Popular Sponsored Recommendations

7 Crucial Steps to Improve Your OT Security

Oct. 23, 2023
Enhance OT security in manufacturing and production. Uncover the crucial steps to safeguard your operational technology. Protect against evolving threats and bridge the IT-OT ...

Why DataOps may be the key to unlocking the full potential of digital transformation

Nov. 3, 2023
Read the 2023 market survey conducted by IndustryWeek

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Modern Edge Computing Accelerates Smart Manufacturing Initiatives for Discrete Manufacturers

Oct. 22, 2023
Discover how Edge Computing platforms are a requisite for discrete manufacturers to solve production challenges, accelerate digitalization, and establish a reliable infrastructure...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!