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To: Johnny Canuck who wrote (57519)	11/15/2023 4:14:40 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69291

Skip to Main Content BREAKING Cisco Stock Tumbles on Weak Outlook By Eric J. Savitz Follow Updated Nov 15, 2023, 4:08 pm EST / Original Nov 15, 2023, 1:00 am EST Cisco CSCO 0.21% Systems is throwing a wrench into the recent rebound in technology stocks. The networking firm reported slightly better-than-expected results for its latest quarter, but the company’s outlook was well short of estimates. The stock was down as much as 13% in after hours trading following the report. Advertisement - Scroll to Continue “Cisco saw a slowdown of new product orders in the first quarter of fiscal 2024 and believes the primary reason is that customers are currently focused on installing and implementing products in their environments following exceptionally strong product delivery over the past three quarters,” the company said in announcing October quarter results. “Cisco estimates there are one to two quarters of shipped product orders still waiting to be implemented by its customers.” The disappointing guidance will raise fresh questions about the health of IT spending in the final months of the year and into 2024. For its fiscal first quarter ended Oct. 28, Cisco (ticker: CSCO) reported revenue of $14.7 billion, up 8% from the year-ago quarter. That’s at the high end of the company’s forecast range of $14.5 billion to $14.7 billion, and slightly above Wall Street consensus of $14.6 billion. Quarterly profit on an adjusted basis was $1.11 a share, above the company’s guidance range of $1.02 to $1.04 a share, and ahead of Wall Street at $1.03 a share. Under generally adjusted accounting principles, Cisco earned 89 cents a share, up 37% from a year earlier. For the January quarter, Cisco is projecting revenue of $12.6 billion to $12.8 billion. The midpoint of that range implies a decline of 6.6% from a year ago, and it’s well short of the Wall Street consensus—as tracked by FactSet—of $14.2 billion. The company sees profits for the January quarter of 82 to 84 cents on an adjusted basis, below consensus of 99 cents, with GAAP profits of 59 cents to 64 cents. For the July 2024 fiscal year, Cisco now sees revenue ranging from $53.8 billion to $55 billion, down from a previous forecast of $57 billion to $58 billion. The new range implies a 2024 revenue decline of nearly 5%. The company now sees adjusted profits for the 2024 year of $3.87 to $3.93 a share, down from a previous projection of $4.01 to $4.08 a share. Advertisement - Scroll to Continue The company did not directly address the company’s order rate in the earnings press release, however, CFO Scott Herren said in the announcement that Cisco expects product order growth rates to accelerate in the second half of the year. Cisco faces a complex operating environment. Equipment providers to the telecommunications sector have been seeing soft demand, resulting in disappointing results from companies like Ericsson, CommScope and others. For now, demand seems stronger from the enterprise sector, as demonstrated by strong results at Arista Networks, which is getting a boost from AI-related cloud computing work. But there are still worries about the outlook for IT spending in 2024, with weakness showing up in some areas, as evidenced by the most recent results from the IT consulting giant Accenture. Cisco’s results will intensify those concerns. BARRON'S NEWSLETTERSThe Barron's Daily A morning briefing on what you need to know in the day ahead, including exclusive commentary from Barron's and MarketWatch writers. I would also like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. I agree to the Privacy Policy and Cookie Policy. SIGN UP Cisco’s results in recent quarters have felt the aftermath of serious component shortages during the pandemic, which drove orders and backlog to historically high levels. As the components issue eased, Cisco has been working down its backlog, driving up shipments and revenue. But that factor has been offset by lower orders, as customers digest the hardware surge. Advertisement - Scroll to Continue Write to Eric J. Savitz at eric.savitz@barrons.com Barron's Topics Memberships Tools Customer Service Network Newsstand For Business For Education For Advertisers Account About Barron's Legal Privacy Notice Cookie Notice Copyright Policy Accessibility Copyright © 2023 Dow Jones & Company, Inc. All Rights Reserved.