Cisco Systems (NASDAQ:CSCO) forecast fiscal fourth-quarter earnings of between 44 cents and 46 cents a share, which fell short of analysts’ prediction of 49 cents per share. Fourth-quarter revenues were projected to grow by between 2% and 5%, rising to a range of $11.4 billion to $11.8 billion, which also missed forecasts of $12 billion, Reuters said.
Investors did not like the outlook and Cisco shares fell sharply, down about 8% in early Thursday trading.
The company announced fiscal third-quarter revenue of $11.59 billion, up 6% from the same time last year. That narrowly beat analysts’ forecast of $11.58 billion, Reuters said.
Adjusted EPS for the quarter came in at 48 cents, up from 42 cents last year, which also exceeded Wall Street expectations of 47 cents a share.
Third-quarter revenue was boosted by a 5% rise in the company’s network switching business. However the company said that sales in the Middle East, Europe and Africa rose 4.6%. U.S. sales increased just 3.2%. Analysts had expected stronger sales figures.
Analysts cited by Reuters said that Cisco was facing a weak market for technology sales, especially in Europe. The company also faced vigorous competition from Hewlett-Packard (NYSE:HPQ), which had reinvigorated its sales position while Cisco “is suffering from stagnation.”