The communication network equipment maker Cisco Systems Inc warned that the costs of its components will be continued to be driven up while there would also be delivery blockages for the rest of the year because of supply chain issues as the firm’ profit forecast for its first quarter was short of estimates of analysts.
An unprecedented semiconductor shortage is being faced by companies all across the world which has driven up costs of even the cheapest parts which has hit companies such as Cisco as such companies use chips in their routers.
"Looking ahead, we expect the supply challenges and cost impacts to continue through at least the first half of our fiscal year and potentially into the second half," said the company’s Chief Executive Officer Chuck Robbins on a call with analysts.
The stocks of the company declined by 1.8 per cent after the earnings report while they have risen by about 23 per cent so far this year.
Cisco has also been unable to take benefit of a rise in demand for chips from telecom companies, which are quickly upgrading their existing networks to 5G, because of the global shortage of semiconductor chips.
The profit per share for the first quarter will likely be between 79 cents and 81 cents, said the San Jose, California based company, the midpoint of which was slightly lower than estimates of 81 cents, according to Refinitiv IBES.
However, the revenue and profit estimates for its fourth quarter beat estimates of analysts as the company benefitted from more people using its videoconferencing platform Webex as well as the virtual private network AnyConnect and cybersecurity products as people and companies adapt to hybrid working environments.
The spread and the impact of the Delta variant of the coronavirus were being monitored by the company and it was yet to see an impact on spending of the customers of the company, company CEO Robbins also said.
Cisco now expects growth of between 7.5 and 9.5 per cent year on year for revenues for its first quarter compared to the estimates of Wall Street of growth of about 7.6 per cent.
(Source:www.ndtv.com)
An unprecedented semiconductor shortage is being faced by companies all across the world which has driven up costs of even the cheapest parts which has hit companies such as Cisco as such companies use chips in their routers.
"Looking ahead, we expect the supply challenges and cost impacts to continue through at least the first half of our fiscal year and potentially into the second half," said the company’s Chief Executive Officer Chuck Robbins on a call with analysts.
The stocks of the company declined by 1.8 per cent after the earnings report while they have risen by about 23 per cent so far this year.
Cisco has also been unable to take benefit of a rise in demand for chips from telecom companies, which are quickly upgrading their existing networks to 5G, because of the global shortage of semiconductor chips.
The profit per share for the first quarter will likely be between 79 cents and 81 cents, said the San Jose, California based company, the midpoint of which was slightly lower than estimates of 81 cents, according to Refinitiv IBES.
However, the revenue and profit estimates for its fourth quarter beat estimates of analysts as the company benefitted from more people using its videoconferencing platform Webex as well as the virtual private network AnyConnect and cybersecurity products as people and companies adapt to hybrid working environments.
The spread and the impact of the Delta variant of the coronavirus were being monitored by the company and it was yet to see an impact on spending of the customers of the company, company CEO Robbins also said.
Cisco now expects growth of between 7.5 and 9.5 per cent year on year for revenues for its first quarter compared to the estimates of Wall Street of growth of about 7.6 per cent.
(Source:www.ndtv.com)