RESEARCH TRIANGLE PARK – Networking conglomerate Cisco (Nasdaq: CSCO) beat the Street with its earnings report on Wednesday but its stock fell 4% in after-hours trading. Why?
A big decline – more than 20% – in orders, says an analyst.
“The revenue and earnings results and even a potential raise to revenue guidance for FY23 might not really matter much into the upcoming earnings print as the bigger focus will be on orders and the implications thereof in relation to guidance for top-line growth in FY24 to be issued in another ninety days time,” JP Morgan analysts wrote in a report before Cisco actually announced earnings.. “In summary, we believe the ‘bogey’ for investors will be the -22% y/y decline in orders, which if repeated this quarter, despite much easier comps, will be seen as definitive proof of a much weaker demand backdrop.”
But Cisco CEO Chuck Robbins was upbeat about the financials.
“We once again delivered a strong quarter in a dynamic environment,” he said in a statement. “In Q3, we delivered record revenue and double-digit growth in both software and subscription revenue. As key technologies like cloud, AI and security continue to scale, Cisco’s long-established leadership in networking, and the breadth of our portfolio position us well for the future.”
Read the full earnings report online.
Cisco operates one of its biggest campuses in RTP, employing several thousand workers.
