LONDON: Cisco Systems on Wednesday cautioned that supply chain issues will linger through the end of the calendar year and forecast its current-quarter profit below estimates, sending the shares of the network gear maker down 5 per cent.
The warning comes at a time when all tech companies are facing a global chip shortage.
“Notwithstanding what’s going on in the supply chain, our revenue guide would have been higher, which could have probably flowed through to improving EPS as well,” Chief Executive Officer Charles Robbins said during an earnings call.
Cisco forecast fourth-quarter profit to be between 81 cents and 83 cents per share, compared with estimates of 85 cents per share, and said it expects a 6 per cent to 8 per cent growth in revenue.
For the third quarter ended May 1, the company reported a 7 per cent rise in revenue to US$12.80 billion from a year earlier, above analysts’ average estimate of US$12.56 billion, according to IBES data from Refinitiv.
Cisco’s service revenue surged 8 per cent and product revenue rose 6 per cent, boosted by a sustained demand for its videoconferencing platform, virtual private network and cybersecurity products as offices remained closed despite accelerated COVID-19 vaccinations.
Net income rose to US$2.86 billion, or 68 cents per share, from US$2.77 billion, or 65 cents per share.
Excluding items, Cisco earned 83 cents per share, above analysts’ estimates of 82 cents per share.
