Cisco Revenue Declines for Fifth Straight Quarter, Shares Fall

Cisco
FILE PHOTO: The Cisco Systems logo is seen as part of a display at the Microsoft Ignite technology conference in Chicago, Illinois, U.S., May 4, 2015. REUTERS/Jim Young

Cisco Systems Inc on Tuesday reported a decline in revenue for a fifth straight quarter, as enterprise clients spent less on its network infrastructure products for offices due to the rise of remote working.

The dour performance overshadowed a better-than-expected forecast for current-quarter revenue and sent the company’s shares 4% lower in extended trading. The stock had risen nearly 8% last week ahead of the results.

Chief Financial Officer Richard Herren said on a call with analysts that the infrastructure platforms unit, whose sales fell 3% in the quarter, took the biggest hit from the COVID-19 pandemic.

The company’s total revenue fell slightly to $11.96 billion in the second quarter ended Jan. 23, from $12.01 billion a year earlier. Analysts were expecting a figure of $11.92 billion, according to IBES data from Refinitiv.

However, the remote working trend boosted demand for the company’s videoconferencing platform Webex, virtual private network AnyConnect and cybersecurity products. 

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Revenue from the company’s services business rose 2% to $3.39 billion.

Cisco said it expects third-quarter revenue to increase between 3.5% to 5.5%, which implies a range of $12.4 billion to $12.64 billion compared with analysts’ estimates of $12.35 billion. 

Reporting by Munsif Vengattil in Bengaluru; Editing by Aditya Soni; Reuters

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