Cisco Systems Announces Earnings

High-tech heavyweight, best known for networking and security equipment and software, Cisco Systems announced earnings for the year ended April 30 on Wednesday, which were flat year over year at $12.8 billion.

Recording around 4% below what is consensus forecast and is only the second time in at least five years when the company’s analysis missed projections, as per FactSet. The midpoint of Cisco’s projection for the current quarter predicted revenue of around $12.7 billion.

Cisco's share price fell 12% on Wednesday's after-hours trading, even after the share price fell by more than 4% in the brutal regular sessions leading up to the report. 

The difference this time is that shock does not seem to have anything to do with demand. Cisco product inventories actually increased by about $1 billion from the second quarter, while reported product revenues increased by only about $95 million in the meantime.

There are signs that China's strict lockdown may be eased in areas like Shanghai, but Cisco does not expect a quick recovery. With a limit of about 350 parts, Robbins predicted "a lot of competition for port and airport capacities" when China's lockdown was opened.

The lockdowns in China didn't start in earnest till overdue March, sparing many tech organizations whose monetary quarters ended then and the impact ought to unfold past hardware corporations that rely on China as a production base.