The markets have been quick to give Cisco the thumbs down as the networking titan prepares to face up to its challenges with a $1bn (£615m) job losses and restructuring programme.
Cisco's third fiscal numbers, published on Wednesday, showed the vendor's quarterly GAAP net sales grew 4.8 per cent on the corresponding period last year to $10.9bn. But net income declined 17.6 per cent to $1.8bn.
Chief executive John Chambers (pictured) picked out switching – where Q3 sales slumped nine per cent annually – and the public sector as the two areas that are currently most "problematic" for Cisco.
In the vendor's Q3 earnings call, transcribed in full by Seeking Alpha, the Cisco chief added: "[These two areas] give us challenges on our growth number. We have to be able to move faster in terms of our organisation structure, but also bring expenses not only in line with top-line growth, but grow top-line growth faster – potentially dramatically faster – than you grow expenses."
The vendor is planning to slash its $16bn-plus operating costs by $1bn over the coming year. Thousands of jobs could be lost as part of the scheme.
The results, and Chambers' frank admission of his company's shortcomings, appear to have spooked investors. Cisco's share price slumped five per cent yesterday.
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