Cisco Shares Hit by Growth Forecast
Cisco's stock dove more than 15 percent in morning trading on the New York Stock Exchange after the company said in its earnings call yesterday that sales growth in its next quarter would be in the single digits.
Company CEO John Chambers said the company expects sales to grow between 3 percent and 5 percent in its next quarter even as some of its smaller competitors post double-digit gains. Juniper Networks, for instance, said in its earnings call last month that its fourth-quarter sales would be about 19 percent higher than last year's revenue.
"While we have seen capital spending moderate in some areas of our business, our execution in the areas we can control and influence speak to the success and relevance of the company's strategy," Chambers said in a company blog post, where he described the company's financial results as "solid."
Cisco made $1.9 billion on sales of $10.75 billion in its first 2011 fiscal quarter. During the same period last year, the company made $1.8 billion on sales of $9.02 billion.
Cisco's routers and switches comprised nearly half of the company's first-quarter sales. The company's routers brought in $1.8 billion and switches revenues reached $3.55 billion.