Revenue Skids With Raised Economic Risks : Cisco

Cisco Systems registered a 4 percent slide in revenue as customers slowdown spending on networking equipment in its latest quarter and predicted a further contraction in the current period.

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It has predicted a further contraction in the current period, extending a slowdown in spending that hit its business in the second half of last year. The shares in Cisco fell almost 5 per cent in after-market trading on Wednesday, leaving its market value some 15 per cent lower than six months ago. The company blamed the contraction on increasing economic and geopolitical uncertainties, leading customers to delay spending on new gear.

In a comment released ahead of a call with Wall Street analysts, Chuck Robbins, chief executive officer, said he remained “confident in our long-term growth opportunities” us customers build out their networks. For the three months to the end of January, Cisco reported revenue of $12bn and pro forma earnings of 77 cents a share, in line with Wall Street forecasts.

It predicted a further revenue decline of 1.5 per cent to 3.5 per cent and pro forma earnings to between 79 cents to 81 cents a share in the current quarter, also in line with expectations. Based on formal accounting rules, Cisco reported net profits of $2.9bn, up from $2.8bn the year before.