forecast quarterly revenue and profit above Wall Street estimates after publishing better than expected quarterly results helped by improved demand for their network equipment amid rising artificial intelligence.
Companies have increased investments in technology IA that require large computing capacitycreating an increase in demand for data centerswhich use Cisco products such as switches and routers.
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However, Cisco has been trying to reduce reliance on its massive networking equipment business, which has suffered in recent years from supply chain issues and a post-pandemic slowdown in demand.
The company announced two rounds of mass layoffs this year in a bid to cut costs as it shifts focus to digital security, cloud systems and AI-driven products.
Cisco concluded in March, aiming to boost its software business amid a tree the IA and at the same time help offset a post-pandemic slowdown by enhancing its digital security.
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The company expects fiscal second-quarter revenue to be between 13.75 billion and 13.95 billion reais, which was above analysts’ average estimate of 13.73 billion, according to data compiled by Lseg.
The forecast for adjusted quarterly earnings per share was 89 to 91 cents, compared with estimates of 87 cents.
The company’s revenue fell 6% to $13.84 billion in the fiscal first quarter ended Oct. 26, beating estimates of $13.77 billion. Adjusted earnings per share of 91 cents also beat estimates of 87 cents.
Cisco now expects annual revenue to be between $55.3 billion and $56.3 billion, compared with a previous forecast of $55 billion to $56.2 billion. Analysts expected $55.89 billion.
The company increased its annual adjusted earnings forecast range to $3.60 to $3.66, $3.52 to $3.58.
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