Investing.com -- Cisco slashed its annual guidance Wednesday despite reporting better-than-expected fiscal first-quarter results amid signs of slowing demand for new orders of network hardware.
Shares in the digital communications technology group (NASDAQ:CSCO) fell sharply in premarket U.S. trading.
Although order growth is seen returning in the second half of the year, the California-based firm reduced its full-year 2024 guidance, forecasting adjusted earnings per share (EPS) of $3.87 to $3.93 on revenue of $53.8B to $55.0B. Its prior outlook had called for per-share income of $4.01 to $4.08 and revenue in a range of $57B to $58.2B.
"Cisco saw a slowdown of new product orders [...] and believes the primary reason is that customers are currently focused on installing and implementing products in their environments following exceptionally strong product delivery over the past three quarters," the company said in a statement.
Speaking in a call with analysts, Chief Financial Officer Scott Herren flagged that there are "one to two quarters worth" of shipped orders awaiting implementation by Cisco's clients.
In a note to clients, analysts at Deutsche Bank noted that while Cisco emphasized that near-term order softness is not related to macroeconomic headwinds or a loss of market share, "[it is] a guidance cut nonetheless, [and] that's unlikely to be well received."
In its first quarter, Cisco announced adjusted EPS of $1.11 on revenue of $14.7 billion, topping estimates of $1.03 and $14.62B from analysts polled by Investing.com.
Yasin Ebrahim contributed to this report.