Cisco expects drop in revenue due to poor demand

Cisco Systems today gave a lackluster forecast for third-quarter revenue and profit and said it continued to expect a pause in customer spending.
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The enterprise networking company forecast adjusted profit of 79 cents to 81 cents per share.

Cisco said its revenue in the current quarter is expected to drop 1.5 percent to 3.5 percent, which translates to $12.51 billion to $12.77 billion, Reuters reported.

“We are seeing longer decision-making cycles across our customer segments for a variety of reasons, including macro uncertainty as well as unique geographical issues,” Cisco Chief Executive Officer Chuck Robbins said on a post-earnings call.

Cisco’s infrastructure unit, which includes its traditional business of supplying switches and routers, posted an 8 percent drop in revenue to $6.53 billion.

The business has struggled as customers increasingly prefer using cloud-based services offered by companies such as and Microsoft instead of upgrading their networks and servers.

Cisco reported revenue declines across all its geographies, including a 5 percent drop in Americas, its biggest market that accounts for about 58 percent of its revenue.

Sales in its application software unit fell 8 percent to $1.35 billion, while its fast-growing security business – which offers firewall protection and breach detection systems – rose 9 percent to $748 million.

Cisco said its revenue fell 3.5 percent to $12 billion in the second quarter ended Jan. 25.