Cisco 1Q earnings up 8 pct; outlook sinks stock
NEW YORK (AP) -- Cisco Systems Inc. said Wednesday that its earnings for the latest quarter climbed from last year. But the company's outlook for the current quarter cast some doubt on the pace of recovery in corporate technology spending and sent Cisco's shares down more than 10 percent in extended trading.
New downbeat comments from the company's CEO on the pace of its customers' spending also helped push shares lower in extended trading.
The stock dropped $2.51, or 10.3 percent, to $21.98 in after-hours trading.
On a conference call with analysts, Chief Executive John Chambers said that new orders from government customers as well as some service providers fell below the company's expectations.
That's after Chambers rattled investors back in August by pointing to "unusual uncertainty" among customers about the economy.
As the world's biggest supplier of network equipment, Cisco offers a fair reading on the pace of corporate investment. And it's a more forward leaning barometer than most companies because its most recent quarter includes October, where most companies have reported results for the July-September period.
Cisco said Wednesday it earned $1.9 billion, or 34 cents per share, in the fiscal first quarter ended Oct. 30. That's up 8 percent from $1.8 billion, or 30 cents per share, a year ago.
Stripping out unusual items, it would have earned 42 cents per share. Analysts expected 40 cents.
Revenue rose 19 percent to $10.75 billion, just above the average forecast of $10.74 billion.
But that was still below the $10.95 billion that analysts had predicted for the quarter in August, before the company lowered expectations.
Cisco's outlook for the quarter that ends in January also fell short. It expects revenue growth over the same quarter a year ago of 3 percent to 5 percent. That works out to between $10.1 billion and $10.3 billion, while analysts expected $11.08 billion.