Cisco shares fall on weak revenue outlook
Cisco reported in-line financial results Wednesday but its shares took a hit following a lower than expected revenue outlook.
The tech giant reported a net income of $2.5 billion, or 50 cents per share. Non-GAAP earnings were 60 cents per share on a revenue of $11.9 billion, down 1 percent year over year.
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Wall Street was looking for earnings of 58 cents per share with $11.89 billion in revenue. Cisco's shares were down more than 5 percent after hours.
For the current quarter, Wall Street is looking for non-GAAP earnings of 62 cents per share with $12.51 billion in revenue. Cisco responded with a revenue outlook that ranges from a 4 percent to 6 percent decrease, with EPS between 60 cents a share and 62 cents a share.
Breaking revenue down by segment, Cisco said Q2 product revenue was $8.8 billion led by wireless and security. Switching revenue increased 2 percent, collaboration revenue increased by 4 percent and data center revenue decreased by 5 percent. Meanwhile, service provider revenue decreased by 30 percent.
Cisco CFO Kelly Kramer said the company "will continue to invest in growth areas as we move the business toward more software and recurring revenue and return value to shareholders."
"I am pleased with the progress we are making on the multi-year transformation of our business," added Cisco CEO Chuck Robbins. "We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure."