Cisco second-quarter forecast disappoints; shares fall
(Reuters) - Cisco Systems Inc on Wednesday forecast second-quarter revenue and profit below estimates as the network gear maker struggles to shift to a software-focused company from its business of selling routers and switches, sending shares down 4%. Analysts have been worried about the impact of the U.S.-China trade war on the company's sale of switches and routers, as some of these are made in China.
(Reuters) - Cisco Systems Inc on Wednesday forecast second-quarter revenue and profit below estimates as the network gear maker struggles to shift to a software-focused company from its business of selling routers and switches, sending shares down 4%.
Analysts have been worried about the impact of the U.S.-China trade war on the company's sale of switches and routers, as some of these are made in China.
Cisco had said in the last quarter that U.S. tariffs and Chinese customers shunning its network gear was hurting its business.
The company said it expects revenue in the current quarter to drop by 3% to 5% from a year earlier to between $12.07 billion to $11.82 billion. Analysts were expecting revenue of $12.77 billion, according to IBES data from Refinitiv.
The company has been moving its focus to newer areas such as software and cyber security to counter slowing demand for its routers and switches as companies increasingly opt for cloud-based services offered by Amazon.com Inc and Microsoft Corp.
Cisco expects profit on an adjusted basis to be between 75 cents and 77 cents per share in the current quarter, below analysts' average estimate of 79 cents.
The gloomy outlook overshadowed first-quarter results, which beat expectations.
Total revenue in the quarter ended Oct. 26 rose nearly 1% to $13.16 billion, above expectations of $13.09 billion.
Excluding items, Cisco earned 84 cents per share and beat estimates of 81 cents.
(Reporting by Akanksha Rana in Bengaluru; Editing by Arun Koyyur)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.