Cisco shares plunge after China lockdown, Ukraine crisis hits outlook | Investment News
(Reuters) – Cisco Systems Inc slashed its full-year profit forecast on Wednesday after COVID shutdowns in China and the war in Ukraine drove sales below estimates in the third quarter, sending forecasts plummeting. shares down 13% in extended trading.
Cisco is the latest U.S. company to report a big hit to profits from Beijing’s ‘Zero COVID’ policy that has deepened supply chain issues and dampened demand for businesses already under pressure from rising coronavirus. inflation.
Executives said the shutdown of operations in Russia and Belarus due to the ongoing conflict hurt revenue growth.
The company now expects revenue growth of 2% to 3% in fiscal 2022, compared to an earlier forecast of 5.5% to 6.5%.
“We believe that our revenue performance over the next several quarters will be less dependent on demand and more on the availability of supply in this increasingly complex environment,” chief executive Chuck Robbins told a conference call. post-benefit phone call.
Its adjusted earnings forecast of $3.29 to $3.37 per share was lowered from the $3.41 to $3.46 per share previously forecast.
The company posted third-quarter adjusted profit of 87 cents on revenue of $12.8 billion, against expectations of 86 cents on revenue of $13.87 billion, the data showed. IBES from Refinitiv.
He expects fourth-quarter revenue to decline 1% to 5.5%, while adjusted earnings expectations of 76 cents to 84 cents per share were well below estimates of 92 cents.
Cisco shares were trading at $40 in extended trading, after closing down 4.4% on Wednesday. They have lost about 23.7% so far this year.
(Reporting by Yuvraj Malik and Eva Mathews in Bengaluru; Editing by Devika Syamnath)
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