Cisco CEO Chuck Robbins commented on the company’s earnings report as they anticipate a challenges getting new products orders to customers. In the statement made during the World Economic Forum, Robbins admitted that new product orders slowed down, with sales cycles remaining longer than usual. This has affected the company’s stock prices, leading to a 13% decline in extended trading after disappointing forecasts for the current quarter and fiscal year.
Despite their difficult forecast, Cisco still managed to exceed expectations for adjusted earnings per share in the first fiscal quarter, with reported earnings of $1.11 per share compared to the expected $1.03. Revenue also slightly exceeded analyst estimates, coming in at $14.67 billion versus the expected $14.61 billion.
However, Cisco is projecting a 6.6% revenue decline in the fiscal second quarter, with adjusted earnings per share expected to come in lower than anticipated by analysts. Additionally, the company has also lowered its full-year revenue forecast, although it increased its earnings outlook.
Chuck Robbins also stated that the company has announced plans to acquire data analytics software maker Splunk for $28 billion, and they are confident that they can win over $1 billion worth of orders for artificial-intelligence infrastructure from cloud providers in the 2025 fiscal year. Despite these announcements, Cisco shares have only seen a 12% increase so far this year, trailing the S&P 500 index, which is up 17% over the same period.
In response to the company’s disappointing forecast, Cisco shares took a hit, falling 13% in after-hours trading on Wednesday. However, the response from investors will be closely watched in the coming days.