Cisco, which reported fiscal fourth-quarter results Wednesday, is coming off a spike in demand fueled by the end of pandemic-era supply shortages. Though growth is now decelerating sharply from last year’s surge, Chief Executive Officer Chuck Robbins pointed to a bright future where revenue is more consistent — thanks to subscription-based services — and Cisco capitalizes on the transition to AI-focused data centers.
That outlook helped send the stock up as much as 5.4% in New York on Thursday morning, the most since February, following an initial decline when the quarterly report was released. The company also said it plans to keep increasing share repurchases and dividends.In the period ending in October, sales will rise to about $14.6 billion. That’s in line with analysts’ estimates of $14.57 billion. Excluding certain items, profit will be roughly $1.
The growth forecast pales in comparison with the 11% jump in Cisco’s just-ended fiscal year. The company had seen orders stack up during a prolonged period of component shortages. With those parts now available, Cisco has been able to ship hardware — and sell associated software — to meet pent-up demand. But that surge is fading.
But Cisco still mostly relies on selling expensive pieces of network equipment — with proprietary software — and that makes it hard to avoid the swings in demand from corporate customers. The company’s sales increase of 11% last year is expected to downshift to just 2% this year.
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