Updated from 11:04 a.m. ET
Credit Suisse First Boston
cut its fiscal third-quarter revenue expectations for
and lowered its price target on the networking equipment maker, citing the mounting evidence that the slowing U.S. economy is having a worse-than-expected effect on technology companies.
The firm expects Cisco's revenue to fall 5% to 10% sequentially. Credit Suisse also projected earnings of 11 cents a share, below the 35-analyst consensus compiled by
First Call/Thomson Financial
of 14 cents. The firm cut Cisco's price target to $40 from $45, but reiterated its buy rating on the company.
Shares of Cisco fell 88 cents, or 3.3%, to $26.06 in recent
The firm also said it was cutting its fourth-quarter earnings estimate to 13 cents a share from 14 cents, and lowering the full-year projection to 60 cents from 63 cents. Wall Street is calling for the company to earn 15 cents in the fourth quarter and 65 cents for the year. CSFB also dropped its 2002 prediction to 75 cents a share from 79 cents, which is below the 81-cent consensus estimate.
missed analysts' earnings projections by a penny for the second quarter, reporting a profit of 18 cents a share. In a conference call after the numbers were released, the company said revenue growth would grind to a halt in upcoming quarters as a result of the industry slowdown.
In the call, John Chambers, the company's chief executive, said third-quarter revenue would match second-quarter revenue in the best-case scenario, but could possibly fall 5%. He also said fourth-quarter revenue should be flat sequentially. Cisco reported disappointing revenue of $6.72 billion in the second quarter.
The company said revenue growth for the year should be about 40%, short of the 45% growth the company has averaged over the past five years.