In this image, released on May 2, 2021, from left, Cisco CEO Chuck Robbins and Bea Perez, Chief Public Affairs, Communications and Sustainability Officer of the Coca-Cola Company, speak during Global Citizen VAX LIVE: The World Reunification Concert at SoFi Stadium on stage in Inglewood, California.
Kevin Winter | Getty Images
Cisco stock fell 6% in expanded trading on Wednesday after the maker of data center network hardware expected earnings for the quarter to be lower than analysts had anticipated. The company announced the news in its earnings report for the quarter ended May 1, the third quarter of its fiscal year.
This is how the company did it:
- Merits: 83 cents per share, adjusted compared to 82 cents per share, as analysts expected, according to Refinitiv.
- Revenue: According to Refinitiv, $ 12.80 billion versus $ 12.56 billion as analysts expected.
Cisco reversed a five-quarter decline in revenue and grew nearly 7% year-over-year, despite the quarter spanning 14 weeks instead of 14 weeks in the year-ago quarter.
Regarding the forecast, Cisco said that adjusted earnings per share will be 81 to 83 cents and revenue growth of 6 to 8 percent for the fourth quarter of fiscal year. Analysts had expected adjusted earnings per share of 85 cents and sales of 12.82 billion US dollars, which corresponds to a growth of 5.5%.
In the third quarter of fiscal year, Cisco’s top segment, Infrastructure Platforms, which includes sales of network switch hardware, returned $ 6.83 billion, up 6% and more than the FactSet consensus estimate of 6 . $ 77 billion.
The applications segment, which includes Webex video call products, contributed $ 1.43 billion to revenue, up 5 percent and just below the FactSet consensus of $ 1.44 billion.
Cisco has worked with automakers and other companies to address supply chain challenges.
“The good news, and this is reflected in our guidelines, is that we are confident that we will work this through as we have already made revised agreements with several of our key suppliers,” said Chuck Robbins, Cisco CEO, in a conference call with analysts . “We believe these measures will allow us to optimize our access to critical components, including semiconductors, and serve our customers by meeting their needs as quickly as possible.”
The terms of delivery have reduced the gross margin of Cisco’s products and continue to generate costs, said Scott Herren, the company’s chief financial officer.
“I think the problems in the supply chain will stay with us at least until the end of this calendar year,” said Herren.
During the quarter, Cisco completed the acquisition of network hardware maker Acacia Communications for $ 4.5 billion and the acquisition of cloud communications software company IMImobile for $ 730 million. Cisco is also committed to delivering the majority of its portfolio as a service.
Excluding the move after Wednesday’s business hours, Cisco stocks are up roughly 17% year-to-date, compared to a 9% increase in the S&P 500 index over the same period.
Executives will discuss the results with analysts in a conference call starting at 4:30 p.m. Eastern time.
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