Cisco (CSCO) is reporting decreased sales numbers and profits, which have dropped CSCO stock.
Net income dropped 55% to $1.4 billion for the past three months, in part due to challenges with a faulty memory chip. Revenue is down 8% (at $11.2 billion), which the company is blaming on increasing competition from its rivals.
Cisco CEO John Chambers said despite the drop, Cisco remains a financially strong company.
“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.”
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.
Last year, CSCO announced plans to reduce its workforce by 5%.
Meanwhile, as cloud computing popularity increases, it global orders are also falling from countries such as China, Mexico, and Brazil.
CSCO stock is up 8% from this time last year.