“Order as early as you can, because I think these delays are going to carry on into 2024, maybe even 2025,” one analyst told partners.
Analysts say harsh investor reactions to Cisco Q3 earnings don’t carry water.
Cisco shares declined about 15% on Wednesday, marking the largest single-day decline in 12 years, according to MarketWatch. The reactions followed Cisco’s fiscal year Q3 earnings report, in which the networking giant posted flat revenue year-over-year growth. The firm’s collaboration business dropped in year-over-year revenue. Cisco also posted a guidance of 1 to 5.5% decline in its next quarter.
Executives cited Cisco’s pullout from Russia and Belarus, Chinese COVID-19 lockdowns and supply chain issues as reasons for the numbers. It also noted that this year’s Q3 contained one less week than last year’s Q3. CEO Chuck Robbins said the company will overcome the “short-term” challenges.
“While the topline is disappointing, we have navigated this complex year and actually will deliver solid EPS when we’re done,” Robbins said.
But investors aren’t buying the message, Eric Savitz of Barron’s wrote. And some analysts agreed.
“Cisco executives painted a picture of external factors beyond their control,” Futuriom principal analyst Scott Raynovich wrote. “But in fact, if you look at the trend over the past two years – a period in which Cisco’s shares have gone down – there are greater forces at work. Cisco is still in existential crisis, as I have pointed out for years, as its hardware business model still dominates its sales culture, preventing any real growth in the areas it promotes, such as software and cybersecurity.”
Remember when @Cisco told you they were becoming a #software company? And there was no sales pull forward in 2021? If they are becoming a software company then how is it they blame hardware supplies for a disastrous quarter?https://t.co/ZWlbpEsodO #supplychain #networking
— Rayno🇺🇸 ☮️ 🇺🇦 (@rayno) May 19, 2022
The Big Picture
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