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Cisco expects income progress as provide chain pressures ease, Telecom Information, ET Telecom


Sep 2, 2022

Cisco expects revenue growth as supply chain pressures ease

By Tiyashi Datta

Cisco Methods Inc gave a optimistic forecast for first-quarter gross sales as a COVID-19 restoration in China eases provide chain shortages and helps it meet demand for networking {hardware}, sending the corporate’s shares 5% larger in prolonged buying and selling.

The outcomes introduced on Wednesday counsel networking tools makers have began overcoming the part crunch that had stored them from tapping a post-pandemic revival in digital infrastructure spending.

“After a difficult April as a result of COVID-related shutdowns in Shanghai … general provide constraints started to ease barely on the again half of the fourth quarter and persevering with into the beginning of Q1,” Chief Govt Chuck Robbins mentioned on a post-earnings name.

The networking main expects current-quarter income to rise between 2% and 4%, whereas analysts predicted it might stay flat, based on Refinitiv IBES information. Annual income is forecast to leap 4% to six%.

“The information was ok as a result of they begin lapping stronger year-ago numbers. So the information for the yr and quarter are seen as an indication of confidence by the corporate,” Elazar Advisors analyst Chaim Siegel mentioned.

Nonetheless, rising prices are a reason for concern for the maker of routers, switches and communication instruments because it spends extra on freight and logistics to make sure a gentle provide of parts.

After a drop in gross margins within the April-June quarter to 61.3% from 63.6%, CEO Robbins mentioned larger prices would proceed within the quick time period.

That was mirrored in its first-quarter adjusted revenue forecast of 82 to 84 cents, whose midpoint was beneath estimates of 84 cents.

Fourth-quarter adjusted revenue was 83 cents per share, one cent above estimates. Income got here in at $13.1 billion, beating expectations of $12.73 billion.

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