Boston, MA, 11/20/2013 (wallstreetpr) – Confessing that its missed its own revenue forecasts for the recent quarter, U.S-based networking technology manufacturer Cisco Systems, Incorporated (NASDAQ:CSCO) lowered its revenue forecasts for upcoming quarters, citing weakening demands in developing countries in addition to strategically necessary transitions in certain Cisco lines of business. The reported revenue of $12.1 billion for Cisco’s recent quarter ended October 26 missed analyst estimates of $12.36 billion, tumbling profits and recently share value.
Cisco’s net income of nearly $2 billion reported for the first quarter was 4.6% below the roughly $2.1 billion a year prior, yielding earnings per share of $0.37, down from $0.39 for the year-ago quarter. Cisco predicts revenues to slide further by 8% to 10% for upcoming quarters, along with profit forecasts for the full fiscal year below analyst expectations. Citing reasons of economic conditions, Cisco anticipates its worldwide orders dropping from a year earlier, with the trend likely to extend over the upcoming few quarters. Adding to this are internal concerns, with Cisco’s planned launches of new generations of carrier networking equipment already causing decline in income expected from carriers and service providers. Furthermore, Cisco is currently in an ambitious transition phase from set-top box sales for broadband customers to the promising cloud architecture that Cisco expects to be viable.
Considered the undisputed dominant leader of the $50 billion global networking industry, Cisco recently joined the race to acquire ailing Canada-based handset maker BlackBerry (NASDAQ:BBRY). While the acquisition may not materialize with rumors of Blackberry issuing debentures to the tune of $1 billion, the capsizing Canadian’s net worth of about $6 billion is considered strategically lucrative by Cisco, which has repeatedly proven and grown its strategic and technical prowess with a successful acquisition spree comprising over 140 companies spanning over a decade.
Cisco’s cautious business focus realignment will see workforce restructuring including axing about 4,000 Cisco jobs. Stocks plummeted, due to the dismayal quarterly earnings that stunned experts, dropped from last week’s $23 mark to $21.42 at NASDAQ’s November 19 trade close, with after-hours trading posting around $21.40.
