- Cisco Systems reported a slowdown in new product orders and shares plummeted.
- The computer networking equipment maker’s current quarterly outlook came in below estimates and it lowered its full-year guidance.
- Cisco indicated that customers are currently focused on installing and deploying products purchased in the previous three quarters.
Shares of Cisco Systems (CSCO) plunged more than 11% in early trading Thursday, as the computer networking equipment maker’s current quarterly guidance missed estimates and cut its full-year outlook as that customers reduced their expenses.
Cisco said it anticipates second-quarter fiscal 2024 revenue in the range of $12.6 billion to $12.8 billion, well below forecasts. The company also cut its 2024 earnings per share (EPS) estimates to between $3.87 and $3.93 and its revenue to between $53.8 billion and $55 billion. It had previously projected earnings per share between $4.01 and $4.08 and revenue between $57 billion and $58.2 billion.
Cisco said it saw a slowdown in new product orders in the first quarter, adding that it believes “the primary reason is that customers are currently focused on installing and deploying products into their environments following exceptionally strong product delivery over the past few years.” last three quarters. The company explained that it anticipates that between one and two quarters of shipped product orders “are still waiting to be implemented by its customers.”
Cisco executives indicated that while macroeconomic challenges remain, supply chain constraints have eased. They noted that both delivery times and shipping delays have mostly returned to normal levels.
In the first quarter, the company reported earnings per share (EPS) of $1.11 and sales of $14.67 billion. Both were better than expected.
Cisco Systems shares sank to their lowest level since May, leaving them nearly flat for the year.