Cisco system (CSCO) Revenue reported estimated third-quarter earnings while missing Wall Street targets. CSCO stocks have plunged into weak guidance as management has blamed China’s Kovid lockdown for worsening supply chain problems.
The tech giant announced the results after the market closed on Wednesday. CSCO stocks fell 11.6% to 42.76 in early trade on the stock market today.
For the current quarter ending in July, the company forecasts 92 cents profit for Cisco stock versus 80 cents earnings per share.
The company, meanwhile, said it expects revenue to fall by 1% to 5%, projected to grow 5.9%.
Cisco Stock: Product Order Slow
For the period ending April 30, Cisco earnings rose 5% to 87 cents from a year earlier, the company said. Revenue including acquisitions came flat at 12.8 billion.
A year ago, Cisco’s earnings were 83 cents per share on 12.8 billion in sales. Analysts had expected Cisco to earn 86 cents a share on the $ 13.34 billion sale.
Cisco’s product order growth in the previous three quarters was a bright spot. Product orders grew 8% in the April quarter, down from 33% in the second quarter.
“Although the Covid lockdown in China and the war in Ukraine affected our revenue quarterly, the fundamental drivers of our business are strong and we are confident in the long run,” said Chuck Robbins, chief executive of Revenue Disclosure. China has shut down factories amid the spread of the new Kovid form.
Cisco Stock: Did Arista Network Do Well?
But Jeffrey’s analyst George Notre Dame says rivals could outperform Cisco.
“Honestly, it’s a little hard to accept that Cisco China / Covid Lockdown supply chain issue ‘Canary in coal mines’, which was created in April,” he said in a report.
He added: “We feel that Cisco is not working well with its supply chain team. Based on our analysis, Arista Networks (ANET) – Reacted a few quarters before Cisco. “
At Needham, analyst Alex Henderson said in a report: “Cisco is primarily blaming its approach on supply chains, especially power supply. Its direction is significantly weaker than any other company in the division.”
Russia’s invasion of Ukraine has reduced revenue by $ 200 million, Cisco says.
Tech stocks fell 23% in 2022, according to the Cisco earnings report. According to the IBD stock checkup, CSCO stock possesses a relative strength rating of 61 out of possible 99.
Cisco has moved away from the core business of selling network switches and routers. With the acquisition, Cisco aims to increase revenue from software and services
Follow Reinhard Krauss on Twitter reinhardtk_tech For updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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