Despite posting Q1 results largely in line with Wall Street forecasts, Cisco has seen nearly $26-billion wiped off its market value as its shares plunged by a total 11% on the Nasdaq.
According to Reuters, Cisco CEO John Chambers says the company was hit by "dramatic decreases" in orders from US banks and retailers, triggering concerns about its growth prospects and sending its shares down an additional 7% in after-hours trading. Cisco's share price had already seen a decline of 4% prior to after-hours trading.
Chambers told analysts in a conference call that orders had fallen from US financial institutions and car manufacturers and that he expected demand from the US enterprise market – including banks and retailers – to remain "lumpy" for a while.
Cisco's Q1 profit rose 37% to $2,2-billion from $1.6 billion in the same period a year earlier. Revenue rose 16,7% percent to $9,6-billion for the quarter ended October 27. It's August forecast was for revenue of $9,45-billion to $9,55-billion.
More at www.reuters.com .