Chuck Robbins, chief executive officer of Cisco Technologies Inc., pauses during a panel session on day two of the World Economic Forum in Davos, Switzerland, on Jan. 22, 2020.
Jason Alden | Bloomberg | Getty Images
Cisco shares fell about 6% in extended trading on Wednesday after the maker of computer networking equipment provided a disappointing forecast. CEO Chuck Robbins told analysts during a conference call on Wednesday that the company’s chief financial officer, Kelly Kramer, will be retiring.
Here’s how the company did in the fiscal fourth quarter:
- Earnings: 80 cents per share, adjusted, vs. 74 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $12.15 billion, vs. $12.08 billion as expected by analysts, according to Refinitiv.
Revenue in the quarter declined 9% from a year earlier, according to a statement, the third straight quarterly drop. Earnings per share rose 22% as the company reduced operating expenses by 9%.
While much of the technology sector is seeing growth as the economy moves online and more companies rely on software to run their businesses, Cisco is struggling to keep pace because its business historically has centered around expensive hardware. Big public cloud offerings from Amazon, Microsoft and Google have hurt demand for Cisco’s gear in recent years, and the company’s investments in software haven’t made up for the decline.
“While our results reflect the ongoing challenges in the current environment, we executed well,” Robbins said on the conference call. “As you would expect, the pandemic has had the most impact on our enterprise and commercial orders, driven by an overall slowdown in spending. We are seeing customers continue to delay their purchasing decisions in certain areas while increasing spend in others until they have greater visibility and clarity on the timing and shape of the global economic recovery.”
The Infrastructure Platforms unit, which includes switches and routers for data centers, delivered $6.63 billion in revenue, down 16% and above the $6.48 billion estimate among analysts surveyed by FactSet.
Cisco’s Applications revenue, including sales of the Webex video-calling software, totaled $1.36 billion, which was down 9% and below the $1.45 billion consensus estimate.
In the quarter, Cisco announced its intent to acquire network monitoring company ThousandEyes for about $1 billion and introduced new solutions for remote work and learning as the coronavirus pandemic continued.
The company forecast fiscal first-quarter guidance of 69 cents to 71 cents in adjusted earnings per share and a revenue drop of 7% to 9%. Analysts polled by Refinitiv had expected 76 cents in adjusted earnings per share and $12.25 billion in revenue for the quarter, which works out to a roughly 7% decline.
As of Wednesday’s close, Cisco shares were flat for the year.
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