Cisco slides on light guidance after product order slowdown

Chuck Robbins, CEO and Chairman of Cisco, speaks on Squawk Box at WEF in Davos, Switzerland on January 18, 2023.

Adam Galika | CNBC

Cisco Shares fell 13% in extended trading on Wednesday after the networking equipment maker issued bleak guidance for the current quarter and full fiscal year.

Here's how the company fared compared to the consensus of analysts polled by LSEG, formerly known as Refinitiv:

  • Income: $1.11 per share, adjusted, vs. $1.03 per share expected
  • Income: $14.67 billion vs. $14.61 billion expected

Revenue rose 7.6% in the fiscal first quarter ended Oct. 28. statement. Net income of $3.64 billion, or 89 cents per share, was up from $2.67 billion, or 65 cents per share, in the year-ago quarter.

New product orders slowed in the quarter, mainly because customers are busy installing and deploying products after strong shipments in the previous three quarters, Cisco said in a statement. The company predicts that one to two-quarters of the products shipped are waiting to be shipped.

For guidance, Cisco asked for adjusted earnings of 82 cents to 84 cents per share on a range of $12.6 billion to $12.8 billion for the fiscal second quarter. This implies a 6.6% decrease in revenues. Analysts polled by LSEG had expected adjusted earnings of 99 cents on $14.19 billion.

Cisco lowered its full-year revenue forecast but raised its revenue outlook. The company now sees adjusted earnings of $3.87 to $3.93 per share on revenue of $53.8 billion to $55.0 billion. In August, it was looking for adjusted earnings of $3.19 to $3.32 per share and revenue of $57.0 billion to $58.2 billion. Analysts polled by Refinitiv had expected $4.05 in adjusted earnings per share and $57.76 billion.

Executives will discuss the results with analysts on a conference call beginning at 4:30 PM ET.

In after-hours trading, Cisco shares are up 12% this year, lagging the S&P 500, which has risen 17% over the same period.

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