Cisco Tumbles on Disappointing Revenue and Forecast

American multinational technology conglomerate corporation Cisco reported its first quarter financial results that did little to impress Wall Street.

The company saw its shares tumble as much as 8% in extended trading on Wednesday after falling short of expectations and reporting weaker than expected guidance.

Cisco reported 82 cents a share adjusted for the first quarter compared to 80 cents that had been expected by analysts, per Refinitiv. Revenue at $12.09 billion was below the $12.98 billion that had been expected by analysts, again per Refinitiv.

Looking ahead, the company said that per-share earnings in the fiscal second quarter will be between 80 cents and 82 cents, excluding some items, on 4.5% to 6.5% annualized revenue growth.

Analysts polled by Refinitiv were waiting for 82 cents per share in adjusted earnings on $12.85 billion in revenue, which implies 7.4% growth.

For the full fiscal year, the company’s forecast was $3.38 to $3.45 in adjusted earnings per share and 5% to 7% revenue growth. Analysts polled by Refinitiv had expected earnings of $3.42 per share and $52.87 billion in revenue, which would equal 6.1% growth.

Revenue rose 8% in the first quarter from a year earlier, the company said in a statement. Net income, at $3 billion, grew 37%.

CEO Chuck Robbins said on a conference call with analysts that Cisco had been dealing with supply constraints.

“We’ve been taking multiple steps to mitigate the supply shortages and deliver products to our customers, including working closely with our key suppliers and contract manufacturers, paying significantly higher logistics costs to get the components where they are most needed, working on modifying our designs to utilize alternative suppliers where possible and constantly optimizing our build and delivery plans,” Robbins said.

“While we thoughtfully raise prices to offset this impact, the benefits are not immediate and will be recognized over the coming quarters,” he said. Meanwhile, customers are frustrated with lead times for receiving products, Robbins added.

Cisco shares are still up over 25% this year so far.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.