On January 18, 2023, Cisco CEO Chuck Robbins was interviewed by Bloomberg TV at the World Economic Forum in Davos, Switzerland.
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Cisco Shares of the company rose about 8% on Thursday, their best day since March 2020, after the computer networking company said it would cut 7% of its workforce and reported quarterly results that beat analysts’ expectations.
Morgan Stanley analysts said in a note to investors that Cisco’s performance was better than expected.
“Cisco’s better-than-expected fourth-quarter results and better-than-expected order numbers provide relief and support Cisco’s return to a more predictable pattern after nearly four years of chaos,” the analysts wrote. They recommend buying the stock.
Cisco reported revenue of $13.64 billion for the quarter, above Wall Street expectations of $13.54 billion. Revenue fell 10% from the same period last year, and sales fell for the third consecutive quarter. Net profit plummeted 45% compared with the same period last year, but profits still exceeded expectations.
Analysts at Bank of America pointed out that online sales fell 28.1% year-on-year, but said this was mainly due to strict comparisons, and the focus of this quarter was the recovery of orders.
Analysts with a buy rating on Cisco wrote in a report: “Data center switching orders increased by double digits year over year, while campus switching and routing orders increased by high single digits.” They added that with artificial intelligence The related order book exceeds US$1 billion, and revenue will begin to increase in the first half of 2025.
The company’s core networking business, which includes routers and switches, has been struggling since big companies began migrating to the cloud. Cisco’s sales have been partially offset by recurring revenue from its software and securities businesses.
Cisco said in an article Archive The company is implementing a restructuring plan that includes job cuts, which will result in a $1 billion pre-tax charge on its financial performance and will “allow it to invest in key growth opportunities and improve business efficiencies.”
Chief Executive Chuck Robbins said Thursday on CNBC’s “Squawk on the Street” that the company will try to move some employees to other positions within the company.
“One of the big questions we discussed was, will everyone think this is driven by artificial intelligence?” Robbins said. He added that one aspect of artificial intelligence could use automated systems to make general and administrative tasks more efficient.
This is Cisco’s second round of large-scale layoffs this year. The company said in February it would cut 5% of its workforce, or more than 4,000 jobs. As of the end of fiscal 2023, before the first layoffs, Cisco had 84,900 employees.
—CNBC’s Michael Bloom and Ari Levy contributed to this report.
watch: Cisco CEO Chuck Robbins discusses fourth-quarter results
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