Cisco plunges as Q3 results miss expectations, outlook falls short of forecasts
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Cisco (NASDAQ:CSCO) shares plunged as much as 13% in after-hours trading, Wednesday, after the networking equipment giant posted third-quarter results that missed expectations, and also lowered its full-year earnings estimates.
For the period ending April 30, Cisco said it earned 87 cents a share, excluding one-time items, on $12.8 billion in revenue. Analysts were expecting the company to earn 86 cents a share on $13.34 billion in sales.
"We continued to see solid demand for our technologies and our business transformation is progressing well," said Cisco (CSCO) Chief Executive Chuck Robbins, in a statement. Robbins added that despite its disappointing results, "The fundamental drivers across our business are strong and we remain confident in the long term."
Still, Robbins admitted that Cisco's (CSCO) sales had seen some negative impact from "Covid lockdowns in China and the war in Ukraine" during in the quarter."
Cisco (CSCO) also lowered its full-year earnings forecast to between $3.29 and $3.37 a share, down from a previous outlook of $3.41 to $3.46 a share. Analysts had expected the company to earn $3.44 a share for the full year.
Full-year revenue is expected to grow between 2% and 3%, down from a previous outlook of 5.5% to 6.5% growth.
Looking ahead to its fourth quarter, Cisco (CSCO) expects revenue to decline between 1% and 5.5%, with adjusted earnings between 76 cents and 84 cents a share. 
Cisco's big after-hours drop had an effect on some of its rivals such as Juniper Networks (JNPR), which fell more than 6%, and Arista Networks (ANET), down by more than 5%.
Speaking on a conference call to discuss Cisco's (CSCO) results, Robbins said the company's business forecast is "not a reflection" of a lack of demand from its customers.
Last month, Citi downgraded Cisco (CSCO) shares to sell, with the investment firm expecting some challenges to its market share from rivals.