Network supplier Cisco Systems has cut its full-year earnings forecast after COVID lockdowns in China and the war in Ukraine dragged sales below estimates in the third quarter.
Cisco also said fourth-quarter revenue would decline by 1 percent to 5.5 percent, becoming the latest U.S. company to outline a hit from Beijing’s Zero COVID policy that has worsened supply-chain snags and hurt demand amid rising inflation.
Cisco will be facing component shortages over the coming quarters. Cisco said third-quarter revenue growth took a $200 million hit from stopping business in Russia and Belarus.
Cisco revealed that Russia, Belarus and Ukraine collectively, represented approximately 1 percent of total revenue in the previous quarters.
Cisco, which sells networking equipment and software to telecoms and enterprises to connect devices to the internet, expects revenue growth of 2 percent to 3 percent in fiscal 2022, compared with an earlier forecast of 5.5 percent to 6.5 percent.
Cisco is estimating Adjusted profit between $3.29 and $3.37 per share from $3.41 to $3.46 per share earlier.
In the third quarter of fiscal 2022, Cisco closed the acquisition of Opsani, a privately held enterprise software company.
Cisco said Q3 FY 2022 revenue was flat at $12.8 billion, with product revenue up 3 percent and service revenue down 8 percent.
Cisco said revenue by geographic segment was: Americas up 5 percent, EMEA down 6 percent, and APJC down 6 percent.
Cisco’s product revenue performance was led by growth in Networks up 4 percent, Internet for the Future up 6 percent, Security up 7 percent, and Optimized Application Experiences up 8 percent. Collaboration was down 7 percent.
Cisco has reported Q3 fiscal revenue of $5.869 billion (+4 percent) from Secure, Agile Networks, $1.1324 billion (+6 percent) from Internet for the Future, $1.132 billion (–7 percent) from Collaboration, $938 million (+7 percent) from End-to-End Security and, $183 million (+8 percent) from Optimized Application Experiences.