Cisco (NASDAQ:CSCO) shares tumbled Thursday after the company reported weaker-than-expected guidance. It had already dropped 4% Wednesday, on a disastrous day for stocks. Earnings proved to be 83 cents per share, vs. 82 cents per share as expected by analysts. Revenue was $13.43 billion, vs. $13.38 billion as expected by analysts.
Revenue grew 6% on an annualized basis in the quarter. Said CEO Chuck Robbins, "We did see in July some slight early indications of some macro shifts that we didn’t see in the prior quarter," Robbins added in the quarter Cisco company saw "significant impact" on business in China because of the U.S.-China trade war.
In China, Cisco’s revenue was down 25% on an annualized basis in the quarter. The majority of Cisco’s revenue comes from sales of data center networking products, including switches and routers.
That business is represented by Cisco’s Infrastructure Platforms segment, which came up with quarterly revenue of $7.88 billion, above the $7.84-billion consensus among analysts.
The Applications segment had $1.49 billion in revenue, in line with the $1.49 billion. Cisco’s Security business contributed $714 million in revenue, less than $739.9-million consensus estimate.
As for guidance, Cisco said it expects to report 80 to 82 cents in earnings per share, excluding certain items, and flat to 2% revenue growth in the first quarter of its 2020 fiscal year. Analysts were looking for 83 cents in earnings per share, excluding certain items, and $13.40 billion in revenue, or 2.5% growth, for that period.
Shares of the company are up 17% since the beginning of the year. They collapsed $3.05, or 6%, early Thursday to $47.56
