Cisco Systems Inc missed Wall Street expectations for first-quarter revenue on Wednesday, hurt by slackening demand for on-campus network hardware as businesses move operations to the cloud, sending its shares down nearly 6% in extended trading.
The San Jose, California-based company has been shifting its focus toward softwares including videoconferencing tool WebEx and cybersecurity services to help clients adapt to online workspaces.
Industry experts say Cisco is set to benefit from a boom in cloud computing and 5G adoption in an increasingly digital world. However, supply issues including chip shortages and shipping bottlenecks have prevented the company and its peers from capitalizing on strong demand and are expected to continue affecting the sector in the near term.
The company forecast second-quarter revenue growth between 4.5% and 6.5%.
Net income for the quarter rose to $3 billion, or 70 cents per share, from $2.2 billion, or 51 cents per share, a year earlier.
Revenue for the quarter ended Oct. 30 was $12.90 billion. Analysts on average had expected revenue of $12.98 billion, according to IBES data from Refinitiv.
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