Cisco Systems Inc. shares slid by more than 1% during the late afternoon trading on Wednesday’s session. The selloff resulted from the company’s recent fiscal fourth-quarter revenue that narrowly missed most analyst expectations. The company also posted a weak earnings forecast for the coming quarter.
For the fourth fiscal quarter this 2017, Cisco Inc posted earnings of 61 cents per share as expected by most analysts. Cisco’s revenue also came at around $12.1 billion also meeting most analyst estimates of $12.06 billion. However, the revenue for the quarter was down by 4% from the previous year and is recording for the seventh consecutive quarter in a row. Cisco’s earnings for the quarter that ended last July was also down by 3%.
Despite meeting most analyst forecasts for its quarterly earnings report, the company did warn that their revenue for the coming quarter would be down by around 1 to 3 percent. This is a higher decline than what most have expected at around 2%. However, their earnings guidance for the coming quarter is considerably higher at around $0.59 per share to $0.61 versus most analyst estimates of $0.60 earnings per share.
Shares were down by as much as 2.5% during the after-hours trading on Wednesday to $31.53 losing around $2 from the previous trading session. Cisco shares have only risen by around 5% this year following a weak earnings guidance delivered by the company last May.
Cisco’s revenue has already lost around 9% on an annual basis to $3.44 billion compared to a forecasted number of $3.56 billion.
During its third-quarter fiscal report, the company warned that it would deliver weak earnings for the fourth fiscal quarter. Cisco shares then fell by almost 5% despite slightly beating most analyst estimates. The company posted earnings of $ 0.60 per share versus most estimates of $0.58 earnings per share. The company was also able to beat their revenue forecasts of $11.89 billion after posting a third fiscal quarter revenue of $11.9 billion.
Cisco who has been trying to transition into offering more cloud-based services in the past couple of quarters. This year, the company has been acquiring artificial intelligence and cloud-based start-up companies in the past couple of months to boost their efforts. Some of these acquisitions include companies such as Observable Networks, OpenDNS, Lancope, and Cloudlock. Cisco chief financial officer Kelly Kramer has previously stated that Cisco’s lower earnings guidance can be attributed to the company’s further investments in expanding their business and giving value back to their shareholders.
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