Cisco story updated with executive comments and more information from the company's conference call.
NEW YORK (
(CSCO - Get Report) shares fell 2.6% in after-hours trading Wednesday after edging Wall Street's third-quarter estimates, as the company continues to refocus operations on its core networking business.
The San Jose, Calif.-based company is trying to turn around its business after a failed attempt to build a consumer brand
allowed rivals like HP
(JNPR) to grab networking market share.
Cisco brought in revenue of $10.9 billion and adjusted earnings of 42 cents a share, compared to $10.4 billion and 42 cents a share during the same period last year. Analysts had forecast sales of $10.86 billion and earnings of 37 cents a share.
"We have acknowledged our challenges," CEO John Chambers said in a press release. "We know what we have to do. We have a clear game plan."
The company plans to implement a headcount reduction this summer, it said during its analyst call, and intends to reduce costs by $1 billion by the end of fiscal year 2012.
Chambers again reiterated concern about the public sector, which saw an 8% annual decline, compared to 30% growth four quarters ago.
"There are no excuses, we must adjust quickly," he said.
Cisco's switching business also declined 9% year-over-year as a result of pricing pressures.
Cisco said it expects adjusted earnings between 37 cents and 39 cents per share for the fourth quarter, below analyst expectations of 42 cents per share. Revenue growth will be flat to up to 2%, it said, below the 7% to 8% growth analysts had anticipated.
Cisco shares have declined 30% within the last month because of its sluggish growth, while the Nasdaq composite has risen 20%.
--Written by Olivia Oran in New York.
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