Proactive Investors - Cisco Systems Inc (NASDAQ:CSCO, ETR:CIS) shares fell almost 5% in extended trading Wednesday as the networking, security and cloud firm slashed its full-year revenue guidance.
Cisco now expects revenue between $51.5 billion and $52.5 billion against estimates of $54.2 billion. It had previously forecast revenue in the range of $53.8 billion to $55 billion for fiscal 2024.
It also forecast adjusted earnings per share (EPS) in the range of $3.68 to $3.74, below the expected $3.88.
For fiscal 3Q, Cisco expects to post revenue in the range of $12.1 billion to $12.3 billion, almost a billion dollars below the Wall Street consensus estimate of $13.05 billion.
Adjusted earnings per share are forecast to be in the range of $0.84 to $0.86, missing estimates of $0.91.
On a positive note, for fiscal 2Q, the three months ended January 27, 2024, Cisco reported a year-over-year decrease in both revenue and adjusted EPS, but both numbers came in ahead of expectations.
Revenue was down 6% from the year-ago quarter at $12.8 billion, against the consensus $12.72.
Adjusted EPS of $0.87 was down 1% year-over-year but $0.03 ahead of estimates.
"Focused execution and operating discipline drove our solid top and bottom-line results and strong margins in 2Q," Cisco CFO Scott Herren said in a statement.
"We are making good progress in our business model shift to more recurring revenue while remaining focused on financial discipline, operating leverage and shareholder returns, as evidenced by our increased dividend."
The company increased its dividend by 3% to $0.40.
During its earnings call, the company also said it plans to cut 5% of its global workforce and would focus on high-growth areas such as AI and software.
Cisco shares traded 4.8% lower at $47.85 shortly following the release of its earnings report.