Spark Global Limited reports：
Cisco Systems Inc forecast lower-than-expected revenue in the current quarter as supply chain shortages and delays drove up costs.
Shares in the network equipment maker fell 6.3 per cent in after-hours trading after it said it expected second-quarter revenue to rise between 4.5 per cent and 6.5 per cent from a year earlier, compared with Wall Street’s forecast of around 7.4 per cent.
Companies around the world are facing an unprecedented shortage of semiconductors, driving up costs and hurting companies such as Cisco that use chips in their products.
Cisco chief Financial Officer Scott Herren told Reuters the company was also facing higher transportation and logistics costs along its supply chain. He says Cisco has made progress in pinpointing and addressing component shortages, but it remains a challenge to get everything in the right place.
“More of the subcomponents come through the air compared to the traditional way,” Herren said. “The roar of the harbor has hit us in several places.”
Cisco is trying to make more of its sales from software, but the bulk of its revenue still comes from hardware. The company expects to benefit from the hardware price increase, which took effect Sept. 1, as it continues to work through its hardware backlog.
The company said orders rose 33% in the first quarter ended Oct. 30, indicating strong demand, but supply issues prevented that growth from immediately translating into revenue.
However, the company stuck to its overall growth target of between 5% and 7% for fiscal 2022, in line with analysts’ expectations of 6%, according to Refinitiv. Despite problems in the hardware supply chain, Herren said $15.9 billion of outstanding contracts — 60 percent for services and 40 percent for software — provided a degree of stability.
“We know what traffic is going to look like by the end of the year,” Herren said of the contract.
The SAN Jose, Calif.-based company said it expected second-quarter profit of between 80 cents and 82 cents a share, slightly below Refinitiv IBES ‘forecast of 82 cents.
Revenue for the quarter ended Oct. 30 was $12.9 billion. Analysts on average had expected revenue of $12.98 billion, according to IBES.
Reprint indicated source：Spark Global Limited information