Cisco Shares Drop On Weak Sales Outlook

Cisco projected for revenue to fall between 9% and 11% in the current quarter.
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Cisco shares were down sharply in after-hours trading after the networking firm beat consensus forecasts for revenue, but issued a weak sales outlook. 

For its fiscal fourth quarter, which ended in July, Cisco reported $12.2 billion in revenue, down 9% year-over-year, and GAAP earnings of 62 cents per share, up 22%. Analysts polled by FactSet were expecting GAAP earnings of 65 cents on sales of $12.09 billion.

For the current quarter, Cisco's fiscal Q1 2021, the company guided for a 9% to 11% drop in revenue, and for adjusted earnings between 69 cents and 71 cents per share, below analyst consensus estimates for 75 cents a share. 

Cisco  (CSCO) - Get Report shares were down 6.7% to $44.90 in after hours trading. 

"Throughout fiscal 2020, Cisco has demonstrated operational resilience based on our strong customer relationships, solid financial foundation, and differentiated innovation," said Cisco chairman and CEO Chuck Robbins in a statement. "As we focus on the future, we are rebalancing our R&D investments to focus on new areas so we can continue to offer customers the best, most relevant technology in simpler, more easily consumable ways."

Cisco, which sells networking-focused hardware, software and services, reported drops in revenue across several segments and all regions. Product revenue was down 13%, and service revenue was flat. Infrastructure Platforms revenue was down 16%, and Applications revenue was down 9%. Security revenue grew 10%.

By geographic segment, Americas revenue was down 12%, EMEA (Europe, Middle East and Africa) revenue was down 6%, and APJC (Asia-Pacific, Japan and China) revenue was down 7%.

Heading into earnings, Cisco shares were roughly flat year to date.