Cisco stocks rise as profits continue to slide during pandemic despite slowdown in revenues

Analysts polled by FactSet had forecast adjusted earnings of 71 cents per share on average sales of $ 11.9 billion, although expectations have been greatly reduced since COVID-19 began to grow. spread around the world. Analysts expected adjusted earnings of 80 cents a share on revenue of $ 12.7 billion in late 2019.

Third Quarter Results Announced After Market Close On Wednesday Originally Sent To Cisco
CSCO,
-2.93%

Sharing up to 3% in after-hours operations. Cisco stocks have fallen 20% in the past 12 months, while the S&P 500 index
SPX
-1.74%

It is up 1%. However, since March 12, Cisco's shares have increased by 30%.

“The pandemic has led organizations around the world to digitize their operations and support remote workers at a faster rate and on a larger scale than ever. We remain focused on delivering the technology and solutions our customers need to accelerate their digital organizations, "said Cisco chief executive officer Chuck Robbins in a statement. declaration announcing the results.

See also: Cisco is seeing an increase in videoconferencing, but how will IT departments spend in the COVID-19 era?

As a leading supplier of network equipment, Cisco is a crucial barometer of the demand for information technology by large enterprises. The results underscore the fluidity of overall IT spending in the COVID-19 era despite insatiable demand for certain aspects, namely video conferencing and network infrastructure.

For the fourth fiscal quarter, Cisco expects accelerated revenue cuts, guiding an annual drop in sales from 8.5% to 11.5% after reaching more than $ 13 billion in quarterly revenue the previous year, leading to what suggests that sales will reach less than $ 12 billion. Analysts on average had forecast sales of $ 12.07 billion in the fourth quarter after saving more than $ 750 million in response to COVID-19.