Cisco Systems Inc. slashed its revenue forecast for the fiscal year, and its shares were plunging in Wednesday’s extended session.
The networking company now anticipates $53.8 billion to $55.0 billion in revenue for the full fiscal year, whereas Cisco’s
prior outlook was for $57.0 billion to $58.2 billion. Analysts tracked by FactSet were modeling $57.8 billion on the top line.
Cisco also now expects $3.87 to $3.93 in full-year adjusted earnings per share, down from a prior forecast of $4.01 to $4.08. Analysts were looking for $4.05.
Shares of Cisco were tumbling more than 10% in after-hours trading Wednesday and on track to snap a streak of five post-earnings gains.
“After three quarters of exceptionally strong product delivery our customers are now focused on installing and implementing these unprecedented levels of products,” Chief Executive Chuck Robbins said on the earnings call, according to a FactSet transcript.
He added that “customers are now taking time to onboard and deploy these heightened product deliveries,” and there’s been a slowdown in new orders, mainly with larger enterprise, service provider and cloud customers. The trend “was most pronounced in October.”
The company recorded fiscal first-quarter net income of $3.6 billion, or 89 cents a share, compared with $2.7 billion, or 65 cents a share, in the year-prior quarter. Cisco posted adjusted earnings per share of $1.11, whereas the FactSet consensus was for $1.03.
Revenue rose to $14.7 billion from $13.6 billion a year before, while analysts had been modeling $14.6 billion.
For the fiscal second quarter, the company expects $12.6 billion to $12.8 billion in revenue, whereas analysts were modeling $14.2 billion. The company also is looking for 82 cents to 84 cents in adjusted earnings per share, while the FactSet consensus called for 99 cents.