Cisco Systems (NASDAQ:CSCO) shares plunged early Thursday, after the networking company said it generated lower quarterly revenue than analysts predicted and called for an unexpected sales decline in the current period.
Cisco’s revenue was roughly flat year over year in the quarter, which ended on April 30, according to a statement. The figure was $12.84 billion, vs. $13.34 billion as expected by analysts.
Net income rose 6% to $3.04 billion.
EPS amounted to 87 cents per share, adjusted, vs. 86 cents per share as expected by analysts.
The war between Russia and Ukraine reduced revenue by about $200 million, and it added $5 million to Cisco’s cost of sales in the quarter and $62 million in operating expenses. COVID-19 lockdowns in China also exacerbated component shortages, CEO Chuck Robbins said on a conference call with analysts.
For the fiscal fourth quarter, Cisco called for 76 cents to 84 cents in adjusted earnings per share and a year-over-year decline in revenue of 1% to 5.5%. Analysts polled by Refinitiv had been looking for earnings of 92 cents per share on $13.87 billion in revenue, or growth of about 6%. The guidance range is wider than usual because of the increasingly complex environment, Robbins said.
The “top-line numbers don’t look good,” Robbins said. But employees have been redesigning products to allow for a wider diversity of components, and that could strengthen Cisco’s results in the first half of the next fiscal year, he said.
CSCO opened Thursday down $6.36, or 13.2%, to $42.00
