Cisco second-quarter forecast misses on order slowdown
By Lehar Maan
(Reuters) - Network equipment maker Cisco Systems Inc's (CSCO.O: Quote) forecast adjusted profit and revenue growth for the second quarter below analysts' estimates, citing a slowdown in order growth and weakness in its enterprise business outside the United States.
Shares of Cisco, considered a bellwether for the performance of the broader network gear industry, fell 5 percent to $26.41 in extended trading on Thursday.
A strong dollar hurt demand for Cisco's enterprise products in Asia-Pacific, Canada and Latin America, said Chief Executive Officer Chuck Robbins, who succeeded long-time CEO John Chambers in July.
"Our guidance reflects lower-than-expected order growth in the first quarter, driven largely by the uncertainty of the macro environment and currency impacts," Robbins added.
Cisco said it expected adjusted profit of 53-55 cents and revenue to be flat to up 2 percent, which translates into $11.94 billion-$12.17 billion.
Analysts were expecting a profit of 56 cents on revenue of $12.55 billion, according to Thomson Reuters I/B/E/S.
Needham & Co analyst Alex Henderson attributed Cisco's disappointing forecast to its exposure to emerging markets.
"It has a much higher percentage exposure to those emerging markets than most companies," Henderson said. Continued...