Cisco Systems Inc., the largest maker of machines that run computer networks and the internet, gave a strong sales forecast for the current quarter, indicating some customers remain committed to upgrading their corporate technology infrastructure.
Sales in the periodr ending in July will rise 14% to 16%, Cisco said Wednesday in a statement. That compares with analysts’ average predictions of a 14% increase, according to data compiled by Bloomberg. Excluding certain items, profit will be $1.05 to $1.07 a share, compared with an average estimate of $1.03 a share.
Cisco said demand remains steady and an improved supply chain is giving customers greater confidence to purchase equipment to cope with an ever increasing flow of data. Order cancellations also are well below historic levels, the company said.
Chief Executive Officer Chuck Robbins has tried to recast his company as a provider of networking services and software, which are paid for on a recurring basis, and decrease the company’s reliance on onetime sales of expensive machines. While that’s an attempt to break Cisco’s traditional dependence one-time purchases of expensive gear, the company still needs to get new equipment into the hands of customers so it can sell them the software and services associated with the newer products.
“As key technologies like cloud, AI and security continue to scale, Cisco’s long-established leadership in networking, and the breadth of our portfolio position us well for the future,” Robbins said in the statement.
Cisco shares were little changed in extended trading following the announcement. The stock had earlier closed at $47.63 in New York.
In Cisco’s fiscal third quarter, revenue rose 14% to $14.6 billion. Profit, minus some items, was $1 a share. That compares with estimates of 97 cents a share on $14.4 billion of revenue.
