Cisco Systems Inc. shares declined on Thursday after the networking giant reported quarterly earnings that exceeded expectations but issued guidance that fell short of analyst estimates.
The company posted adjusted earnings per share of $0.88, above the $0.87 forecast by Refinitiv, while revenue reached $12.60 billion, surpassing the $12.45 billion consensus. However, Cisco’s forward guidance for the current quarter fell below market expectations, citing macroeconomic uncertainty and slower enterprise spending.
Shares of Cisco fell 3.5% in after-hours trading following the results, erasing earlier gains. The stock had risen 1.2% during regular trading hours before the earnings release.
Analysts at JPMorgan maintained an Overweight rating on Cisco but trimmed their price target to $55 from $60, citing concerns over near-term demand. Other firms, including Deutsche Bank, reiterated Buy ratings but acknowledged that the weak guidance could pressure the stock in the short term.
The mixed reaction reflects broader concerns about corporate IT spending amid economic headwinds. Cisco’s enterprise customers, including large corporations and telecom providers, have signaled caution in discretionary technology investments, particularly in areas like cloud and cybersecurity.
For investors considering a dip-buying strategy, some analysts suggest waiting for further clarity on demand trends before entering new positions. Others point to Cisco’s long-term position in critical infrastructure as a potential offset to near-term volatility.
The company’s next earnings report is scheduled for November 16, 2023.
