Cisco Systems (CSCO) reported earnings after the bell on Nov. 13 and the Silicon Valley tech giant saw a sharp decline in revenues, especially in markets outside of the US, and the company’s shares plummeted in response.
CEO John Chambers did not mince words when discussing the earnings in a conference call with investors, saying “I’ve never seen this before.” However, Chambers declined to shoulder the blame. He instead blamed the current macroeconomic climate caused by government activities, saying it caused “the lack of confidence that people are seeing.”
The earnings miss, combined with the significant revenue underperformance sent investors scurrying. Two analytical firms – Wedbush and Deutsche Bank (DB) – downgraded the stock, and Goldman Sachs Group ($GS) took Cisco off of their Conviction Buy list. An additional 12 brokerages cut their price target on the tech giant.
For their first fiscal quarter earnings report, Cisco reported a net gain of $2 billion, or $0.37 per share, versus the net gain of $2.1 billion, or $0.39 per share, from the same period a year ago. Revenue for the quarter was $12.08 billion, as compared to $11.9 billion from the same quarter the previous year. Analysts were expecting a net gain of $0.51 per share on revenues of $12.34 billion.
Following the report of the earnings and revenue shortfall, Cisco’s shares fell sharply. Cisco was down 11.94 percent in midday trading to hit $21.12 a share.
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