Cisco Systems said a large backlog of products due to supply chain constraints has hit demand for new orders from customers, Reuters news report said.
Cisco’s product orders fell 23 percent in the third quarter, even as the maker of routers, security services and software products reported a quarterly profit that beat estimates, helped by its aggressive steps to resolve supply chain bottlenecks.
The backlog, combined with macroeconomic conditions, hit demand for new products, company executives said on a post-earnings conference call.
“Increase in product shipments is often leading customers and partners to absorb these shipments prior to placing new orders,” Cisco CEO Chuck Robbins said in its earnings report.
The company forecast modest revenue growth in 2024 and expects to end the fiscal year with roughly double of its normal product backlog.
Cisco also forecast full-year revenue to rise between 10.0 percent and 10.5 percent and now expects annual adjusted earnings per share between $3.80 and $3.82.
Cisco revenue jumps 14%
Cisco has posted 14 percent growth in revenue to $14.6 billion during its third quarter ended April 29, 2023.
Cisco, one of the leading suppliers of networking solutions to telecom operators, has posted revenue of $8.634 billion (+13 percent) from Americas, $3.806 billion (+16 percent) from EMEA and $2.131 billion (+11 percent) from Asia Pacific including Japan, China and India during its third quarter.
Cisco has generated revenue of $7.550 billion (+29 percent) from Secure, Agile Networks, $1.392 billion (+5 percent) from Internet for the Future, $985 million (–13 percent) from Collaboration, $958 million (+2 percent) from End-to-End Security and $204 million (+12 percent) from Optimized Application Experiences.
Cisco expects to achieve revenue growth of 14 percent – 16 percent in its Q4 and 10 percent – 10.5 percent in fiscal 2023.