Cisco Systems shares fall on lower sales and profits

Cisco sign Cisco is often seen as a bellwether for the technology industry

Related Stories

Shares in network equipment giant Cisco Systems fell by more than 4% in extended US trading after the company reported a drop in sales and profits.

Net income fell 55% to $1.4bn (£861m) in three months to January, largely due to a charge over faulty memory chips.

Revenue fell by about 8% to $11.2bn amid rising competition from rivals such as Chinese firm Huawei.

Cisco has also been struggling with weak demand for products such as internet routers from emerging markets.

The company, based in Silicon Valley and regarded as a bellwether for the technology industry, also forecasted revenues to fall up by 6% to 8% in the current quarter.

Cisco chairman and chief executive John Chambers said the company's financial health remained strong.

"I'm pleased with the progress we've made managing through the technology transitions of cloud, mobile, security and video, he said in a statement.

"The major market transitions are networking centric and as the Internet of Everything becomes more important to business, cities and countries, Cisco is uniquely positioned to help our customers solve their biggest business problems."

Orders from China, Brazil, India, Mexico and Russia have fallen in recent months, as the rise of cloud computing dents demand for hardware.

"If you look at hardware spending across the board, it's being negatively impacted not just by the negative-spending environment, but by the movement to the cloud," FBN Securities analyst Shebly Seyrafi said.

In an attempt to reduce costs, Cisco announced plans to cut 5% of its workforce last year.

However, the company raised its quarterly dividend on Wednesday by two cents to 19 cents a share.

More on This Story

Related Stories

From other news sites

* May require registration or subscription

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • A very clever little girlBrain gain

    Why are people getting better at intelligence tests?


  • Don Roberto Placa Quiet Don

    The world's worst interview - with one of the loneliest men on Earth


  • A reveller attends celebrations to mark the 450th anniversary of the city of Rio de Janeiro - 1 March 2015Partying in the streets

    Rio de Janeiro marks 450 years since it was founded


  • BeefaloBeefalo hunt

    The hybrid animal causing havoc in the Grand Canyon


From BBC Capital

Programmes

  • BatteriesClick Watch

    More power to your phone - the lithium-ion batteries that could last twice as long

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.