Due to continued global economic challenges, the slowdown in the global telecom market, and the deceleration in corporate IT spending, Cisco expects revenue for its fiscal third quarter to be down approximately 30 percent sequentially from fiscal second quarter, which was $6.7 billion. The Company expects to be profitable for the third quarter, with pro-forma earnings per share expected to be in the very low, single-digit range. As global economies and capital spending inevitably turn around, the Company's long-term expectations for its segment of the IT industry remain at 30 to 50 percent growth per year.
``The business environment that our segment of the IT industry is facing has never been more challenging,'' said John Chambers, president and CEO. ``In fact, this may be the fastest any industry our size has ever decelerated, which has required us to make difficult business decisions at an unprecedented speed. During this time we have not changed our long-term vision and business strategy for the next three to five years, realizing there will be periods of growth in our industry segment both above and below expected levels.
``Personally, of all the difficult decisions we've had to make, the toughest was the reductions in headcount,'' said Chambers. Cisco expects to take a restructuring charge of approximately $800 million to $1.2 billion during the fiscal third quarter, associated with the restructuring of certain areas of Cisco's business.
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