Cisco says pandemic is worse than crash and recession dot-com
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Cisco Systems Inc. has described the current economic conditions caused by the global pandemic as being worse than the 2000 dot-com crash and the great recession of 2008, but so far it is doing better than expected.
"Despite the difficult environment in which we all operate, we achieved a solid quarter and financial performance in the midst of the greatest financial crisis of our lives", Cisco
CSCO,
CEO Chuck Robbins spoke to analysts on the company's third quarter conference call.
On Wednesday, the network giant announced profits and profits above Wall Street's revised expectations for the quarter. Cisco's $ 12 billion revenue decreased 8% from the same period a year ago, but slightly better than consensus estimates of $ 11.9 billion, and profit adjusted 79 cents per share was even better than expectations of 71 cents per share.
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And while most companies during this pandemic have sought advice or refused to provide advice for the rest of the year, Cisco has also surprised investors by providing a forecast for the next quarter, claiming that She expects revenues to fall between 8.5% and 11.5% year-over-year and adjusted earnings ranging from 72 to 74 cents per share. Its shares rose almost 3% in off-hours trading.
"I still think there is a lot of volatility," chief financial officer Kelly Kramer told MarketWatch in a brief interview, when asked how the company was able to give advice while others differ. "I think it is a balanced guide."
When asked if the fourth fiscal quarter could be the company's fund for the year, Kramer said it was too difficult to call it the fund because COVID- 19 is still hiding. "It depends if there's a secondary push, only God knows what's going on. I think it's too early to call.
As expected, the company saw strong demand for its WebEx video conferencing software, with as many people working from home, including Cisco, where 95% of its workforce does not go to the office. How many free trials will become subscriptions? That's a question, but Kramer said it generated additional potential subscribers and WebEx revenue in the fourth quarter.
Robbins also said that Cisco has helped thousands of customers set up hundreds of thousands of employees worldwide with VPN connections (VPN). He also said that some CEOs are examining their company's IT infrastructure and trying to use that time to repair and modernize their infrastructure.
"This crisis has highlighted the importance of having highly resilient and scalable infrastructure technologies on a global scale to keep the world going, and that is what we are building, "he said. Later in the call, he said that some CEOs said, “ I'll never be ready for something like this again, '' and if there is a wave two in the fall, many of them might say that we need to work on a lot of them right now. I don't know yet, but we think there might be some. "
The company also said it was still too early for its $ 2.5 billion financing program to help customers say how it will affect the next quarter. Kramer said since the program's launch in late April there would be little impact in the fourth quarter, adding that interest comes from small businesses, health systems and many small universities.
Robbins told investors that he believes demand for Cisco products "will be strong when we get out of this situation." Investors also seem impressed with their current resilience and expect this quarter to be the bottom line for COVID-19, as well as the decline in Cisco revenues.