Cisco misses forecasts despite soaring profits
Cisco’s stock plunged nearly 8% in after-hours trading despite boosting quarterly income by 79% year-on-year in its fiscal 4Q10.
However, the networking giant missed its revenue estimate for the quarter – which runs to end-July - and its Nasdaq stock fell 7.92% to $21.85 (€16.90) late yesterday, before recovering slightly to $23.73 early this morning.
The company announced a $1.9 billion profit up from $1.1 billion a year ago, on 27% higher sales of $10.8 billion.
While the figures looked impressive, Wall Street had expected revenue of above $10.9 billion and the stock was marked down in the general sell-off over fears of a weakening US economy.
CEO John Chambers said: “Whether the global economy continues to show mixed signals or not—the strength of our financial model and profit generation serves us well.
He said in a conference call the company was faced with “a large number of mixed signals.
“We think the words ‘unusual uncertainty’ are an accurate description of what’s occurring.”
The company expects revenue in the current quarter to increase 18%-20% from the same period a year earlier, or between $10.65-$10.83 billion – below the average analyst expectations of $10.95 billion.