SAN JOSE — Cisco Systems shares fell in after-hours trading Wednesday after the old-school networking-equipment maker gave an earnings and sales outlook that failed to impress Wall Street, taking some of the shine off the company’s upbeat third-quarter results.
Cisco said it expects its fourth-quarter earnings, excluding one-time items, to be 68 cents to 70 cents a share, on revenue in a range of $12.62 billion to $12.86 billion. Cisco said that range would mean its sales would rise 4 percent to 6 percent from the same period a year ago.
However, Wall Street analysts had forecast Cisco to earn 69 cents a share, on $12.72 billion for its fourth quarter. Since Cisco’s outlook is potentially below analysts’ forecasts, investors sent the company’s shares down 4 percent, to $43.32 in after-hours trading.
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Cisco has been trying to shift its business focus from networking hardware and equipment to more software, security services that customer pay for via subscriptions. Cisco said recurring revenue from such product lines made up 32 percent of the company’s total sales during its third quarter.
During the three months that ended April 28, Cisco earned 66 cents a share, on $12.5 billion in sales, which topped analysts’ expectations for Cisco to earn 65 cents a share, on revenue of $12.44 billion.
Source:: The Mercury News – Business