Cisco's quarterly results exceeded expectations, but their guidance did not meet the mark. They attributed this to a decrease in product requests as customers had been occupied deploying Cisco products they procured in the past few quarters.
Cisco saw a 13% decline in extended trading on Wednesday, following their release of a gloomy outlook for the current quarter and full fiscal year. Whereas estimated earnings were $1.03 per share, Cisco reported $1.11 per share, adjusted. Additionally, revenue was higher than predicted at $14.67 billion, instead of the projected $14.61 billion. Revenue rose by 7.6% from the year-ago quarter with net income amounting to $3.64 billion, or 89 cents per share.New product orders slowed down due to customers' busyness with installations and implementations after the delivery of the three previous quarters. This prompted Cisco CEO Chuck Robbins to discuss the issue in a conference call with analysts. He added that sales cycles remain longer than usual with one to two quarters of shipped products waiting to be implemented.The company provided updated guidance of 82 cents to 84 cents in adjusted earnings per share on $12.6 billion to $12.8 billion in the fiscal second quarter. This suggests a 6.6% revenue decline, which is below analysts' expectations of 99 cents in adjusted earnings per share on $14.19 billion.Full-year estimates show adjusted earnings per share of $3.87 to $3.93 on revenue of $53.8 billion to $55.0 billion, both of which are below previous guidance of $3.19 to $3.32 in adjusted earnings per share and $57.0 billion to $58.2 billion in revenue.To this date, Cisco shares have increased 12% for the year; yet, the S&P 500 index has increased 17% over the same period. In the quarter, the company announced the acquisition of Splunk for $28 billion and plan to enter the AI infrastructure market, hoping to make $1 billion in orders for 2025.
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