Boston, MA 02/07/2014 (wallstreetpr) – Cisco Systems Inc (NASDAQ:CSCO) is one of the companies that continue to struggle in emerging markets. If CSCO can take care of its performance in these markets, it has the potential to attract more investor confidence than it has managed to do up to this point. The demand for Cisco’s products in the emerging markets is not worth writing home about. The company even says that it does not think the blip in sales in these markets is short-term. It believes that there is a pattern that it has noticed with these results, that makes it worried.
If it is true that the company will not fare well in this regard, then it is safe to assume that Cisco owes its shareholders some explanation. Cisco Systems Inc (NASDAQ:CSCO) is not tied down to only a single product. Its products are used in a wide range of industries across the world. Therefore, it is often able to pick out macroeconomic trends that paint a near-perfect picture of the state that the global economy is in at any given moment. Because of this, Cisco believes that it has received accurate indicators showing that US companies will not be doing well in emerging markets for sometime.
Cisco Systems Inc (NASDAQ:CSCO) is part of the companies that will see their performance in emerging markets stutter and suffer a lot in the coming years. Cisco recently announced that it expects its revenues to fall by as much as 10 percent in the current quarter. This announcement led to a huge amount of complaints to the effect that Cisco is losing ground to its competitors, especially the new entrants in the market. The fact that Cisco has seen huge transitions in certain markets where it operates has also impacted negatively on its revenues, and it expects this trend to continue for a while.
Cisco Systems Inc (NASDAQ:CSCO) has been expecting to see a huge upsurge of orders from the developing economies. Thus far, it has not enjoyed the sort of returns it was hoping for from the emerging markets. If anything, the company reported that its orders from the developing markets fell by as much as 12 percent. When you consider that the company’s orders from these developing economies grew by around 8 percent in the last three preceding quarters, you immediately realize the gravity of the situation. Orders from Brazil and Russia fell by 25 percent and 30 percent respectively.
Cisco Systems Inc (NASDAQ:CSCO) says that as long as the orders from the emerging markets do not pick up in the near future, it does not see if its revenues and projections will improve any time soon. Although this may not be what investors wish to hear, it has huge ramifications to wide ranging industries. What it means is that the US companies that operate in the emerging markets may not have much reason to be optimistic during the current quarter. Without improvement in this area, the companies will struggle in fulfilling their obligations to investors and to Wall Street.
It would be interesting to see how Cisco Systems Inc (NASDAQ:CSCO) will navigate through the current situation, to remain attractive to investors and not lose their confidence.
