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Cisco Stock Dips As Fiscal 2022 Revenue Guidance Shows A Slowdown

Amid worries over supply chain constraints impacting its hardware business, Cisco Systems (CSCO) on Wednesday reported fiscal fourth-quarter earnings and revenue that beat expectations. Cisco stock fell after the market close as full-year fiscal 2022 revenue guidance apparently disappointed investors.




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For the July quarter, Cisco earnings came in at 84 cents per share, up 5% from a year earlier. Revenue rose 8% to $13.1 billion.

Analysts estimated that Cisco would earn 83 cents per share on revenue of $13.04 billion, according to FactSet.

For its current fiscal first quarter ending in October, Cisco forecast profit of 80 cents versus estimates of 81 cents. Cisco projected revenue growth of 8.5% at the midpoint of its guidance, topping estimates of 7.5% to $12.83 billion. However, for full-year, fiscal 2022 Cisco said it expects revenue growth in a range of 5% to 7%, slowing from the October quarter.

In its earnings release, Cisco said it’s experiencing “the highest product order growth in over a decade.” Some analysts, though, say Cisco has been offering product discounts to win more business.

Cisco stock slipped 1.2% to 54.40 in extended trading on the stock market today. Also, CSCO stock has gained 24% in 2021.

Cisco Stock: Analyst Day Set For Sept. 15

Based on earlier earnings reports from rivals Arista Networks (ANET) and Juniper Networks (JNPR), analysts expected a Cisco earnings beat. However, global chip shortages have slowed manufacturing. One question has been Cisco’s ability to pass on higher costs to customers through product price hikes.

Cisco plans to hold its first analyst day in a few years on Sept. 15.

Heading into the Cisco earnings report, the company owned a Relative Strength Rating of 78 out of a best-possible 99, according to IBD Stock Checkup.

From a technical view, CSCO stock trades in a 5% buy zone from an entry point of 55.45, according to IBD MarketSmith analysis.

In addition, Cisco stock has shifted away from its core business of selling network switches and routers. With acquisitions, Cisco has aimed to increase revenue from software and services.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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