(Reuters) -Cisco Systems cut its full-year revenue and profit forecasts on Wednesday in a sign that demand for its networking equipment was slowing, sending the company’s shares down more than 10% after market.
The company has in recent years grappled with supply chain issues and a post-pandemic slowdown in demand, which has hastened its push into software offerings like cybersecurity.
To accelerate its diversification and capitalize on the boom in artificial intelligence, Cisco in September agreed to buy cybersecurity firm Splunk for about $28 billion in its biggest-ever deal.
Cisco said it saw “a slowdown of new product orders in the first quarter of fiscal 2024 and believes the primary reason is that customers are currently focused on installing and implementing products in their environments”.
The company said it estimates one to two quarters of shipped product orders are still waiting to be implemented by customers.
For the full year, Cisco expects revenue between $53.8 billion and $55.0 billion, and adjusted per-share earnings in the range of $3.87 to $3.93.
The company had previously forecast annual revenue of $57.0 billion to $58.2 billion, and adjusted per-share earnings of $4.01 to $4.08.
Cisco’s results were in contrast to rivals Juniper Networks and Arista Networks, both of which posted upbeat results last month on the back of strong enterprise spending.
For the second quarter, Cisco expects revenue between $12.6 billion and $12.8 billion, compared with analysts’ estimates of $14.19 billion, according to LSEG data.
On an adjusted basis, the company earned $1.11 per share in the first quarter, beating estimates of $1.03.
Cisco posted revenue of $14.67 billion in the reported quarter. Analysts had expected $14.62 billion.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Shounak Dasgupta)