Cisco forecasts profit below estimates, blames supply chain issues

imageStock Markets45 minutes ago (May 19, 2021 06:07PM ET)

(C) Reuters. FILE PHOTO: A visitor uses a mobile phone in front of the Cisco booth at the Mobile World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Rafael Marchante/File Photo GLOBAL BUSINESS WEEK AHEAD

(Reuters) -Cisco Systems Inc on Wednesday cautioned that supply chain issues will linger through the end of the calendar year and forecast its current-quarter profit below estimates, sending the shares of the network gear maker down 5%.

The warning comes at a time when all tech companies are facing a global chip shortage.

“Notwithstanding what’s going on in the supply chain, our revenue guide would have been higher, which could have probably flowed through to improving EPS as well,” Chief Executive Officer Charles Robbins said during an earnings call.

Cisco (NASDAQ:CSCO) forecast fourth-quarter profit to be between 81 cents and 83 cents per share, compared with estimates of 85 cents per share, and said it expects a 6% to 8% growth in revenue.

For the third quarter ended May 1, the company reported a 7% rise in revenue to $12.80 billion from a year earlier, above analysts’ average estimate of $12.56 billion, according to IBES data from Refinitiv.

Cisco’s service revenue surged 8% and product revenue rose 6%, boosted by a sustained demand for its videoconferencing platform, virtual private network and cybersecurity products as offices remained closed despite accelerated COVID-19 vaccinations.

Net income rose to $2.86 billion, or 68 cents per share, from $2.77 billion, or 65 cents per share.

Excluding items, Cisco earned 83 cents per share, above analysts’ estimates of 82 cents per share.

Cisco forecasts profit below estimates, blames supply chain issues

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.