Cisco’s revenue forecast points to steady technology spending

SAN FRANCISCO: Cisco Systems Inc, the biggest maker of machines that run computer networks and the Internet, has a bullish revenue forecast, helped by corporate and government spending on technology.

Sales in the quarter ending in January will jump 4.5% to 6.5%, Cisco said in a statement.

Analysts had predicted that revenue would expand about 4% from a year ago, when the company generated Us$12.7bil (Rm57.7bil) in sales.

For fiscal 2023, revenue will grow as much as 6.5%, an increase from the company’s previous outlook of as much as 6%.

Cisco’s management has argued that upgrading networks to keep up with the pace of data generation is so important that corporations and government agencies are continuing to spend regardless of external circumstances.

That optimism in the face of the broader economic downturn is being supported by continuing strong orders and Cisco’s ability to meet customer demand via greater availability of components.

The shares rose about 4% in extended trading following the announcement. The stock had earlier closed at US$44.39 (RM202) in New York and has dropped 30% this year.

Under chief executive officer Chuck Robbins, Cisco has been trying to fire up growth with hardware and software, as well as new products provided over the Internet.

Robbins is aiming to make the company a provider of services paid for on a recurring basis and less reliant on one-time sales of expensive machines.

Revenue in the three months that ended Oct 29 gained 6% to Us$13.6bil (Rm61.8bil). Excluding some items, per-share profit was 86 US cents (RM3.91). Analysts had projected sales of Us$13.3bil (Rm60.4bil) and profit of 84 US cents (RM3.82).

Highlighting the demand for Cisco’s gear, its hardware division – the largest contributor to total revenue – posted a sales increase of 12% in the fiscal first quarter from a year earlier.