Cisco Systems Inc. (CSCO) Wednesday reported its results for the third quarter, with earnings beating Street estimates, while revenues falling short of expectations. Moving ahead, the company lowered its outlook for the full year, sending its shares down over 15% in extended trading session.
San Jose, California-based Cisco System’s third-quarter profit rose to $3.04 billion or $0.73 per share from $2.86 billion or $0.68 per share last year.
On an adjusted basis, earnings for the quarter were $3.6 billion or $0.87 per share for the period, compared to $3.5 billion or $0.83 per share a year ago. On average, 23 analysts polled by Thomson Reuters expected the company to earn $0.83 per share. Analysts’ estimates typically exclude special items.
Cisco said its revenues for the quarter were $12.84 billion compared to $12.80 billion last year. Analysts had a consensus revenue estimate of $13.34 billion for the quarter. The company reported product revenue growth of 3%, while service revenue dropped 8%.
“We continued to see solid demand for our technologies and our business transformation is progressing well,” said Chuck Robbins, chair and CEO of Cisco. “While Covid lockdowns in China and the war in Ukraine impacted our revenue in the quarter, the fundamental drivers across our business are strong and we remain confident in the long term.”
Looking forward to the fourth quarter, Cisco expects adjusted earnings of $0.76 to $0.84 per share and revenues to decline 1% to 5.5%. Analysts currently estimate earnings of $0.92 per share and revenue growth of 5.70%.
For the full year 2022, the company now expects adjusted earnings of $3.29 to $3.37 per share and revenues growth of 2% to 3%.
Previously, the company expected adjusted earnings of $3.41 to $3.46 per share and revenue growth of 5.5% to 6.5%.
Analysts currently estimate earnings of $3.44 per share on revenue growth of 6.00%.
CSCO closed Wednesday’s trading at $48.36, down $2.24 or 4.43%, on the Nasdaq. The stock further slipped $7.45 or 15.41% in the after-hours trading.
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