Cisco Systems to further lay off 1100 employees
- Author: Eleanor Harrison May 18, 2017,
May 18, 2017, 16:28
The world's largest networking gear maker has been trying to turn itself into a software-focused company, something attempted by HP with similar results.
Cisco shares were down $2.60 (7.69%) to $31.22 each in after-hours trading Wednesday.
After surprising the industry and announcing 5,500 cuts jobs in August 2016, Cisco has dealt yet another shocker.
The company is expecting fourth quarter revenue to dip between 4% and 6%, between $11.88 billion-$12.13 billion.
For the current quarter, Wall Street is looking for non-GAAP earnings of 62 cents per share with $12.51 billion in revenue.
For its fiscal third quarter 2017 ended April 29, Cisco today reported declines in revenues of 1 percent, compared to the same quarter previous year.
Robbins wasn't so blunt as to put it that way, of course: he complained of a "lack of budget visibility" contributed about one per cent of the decline forecast for Q4.
Democrats and Republicans agreed earlier this month to provide around $1 trillion (roughly Rs. 64,39,846 crores) to keep the federal government funded through the end of the fiscal year on September 30.
For the quarter ended in April, Cisco's revenue edged 0.5% lower to $11.94 billion, as a decline in service revenue more than outweighed a modest uptick in product revenue.
On a more positive note, revenue in Cisco's security business, which offers firewall protection and breach detection systems, is on the rise.
The security business is set to receive help from a jump in spending by companies and governments following the recent global "ransomware" attack, according to some analysts.
Cisco, like other legacy technology players, is shifting its focus to high-growth areas such as security, the Internet of Things and cloud computing, amid intense competition from companies such as Huawei and Juniper Networks Inc.
The company said it expected an adjusted profit of 60 cents-62 cents per share for the current quarter. Share prices fell as much as 8.6 per cent in extended trading following the announcement. The company's 3rd quarter of fiscal 2017 ended April 29. Cisco's revenue in Asia Pacific including Japan, China and India fell 2 percent to $1.89 billion. The company said past year it expects to reinvest the cost savings from its restructuring plan into "key priority areas such as security, IoT, collaboration, next generation data center and cloud".