Cisco warns for Q3, Q4 by Chris Kraeuter
Cisco Systems (CSCO) said third-quarter revenue will be $4.69 billion, or a decline of 30 percent from the previous quarter's revenue of $6.7 billion. Analysts surveyed by First Call/Thomson Financial had expected revenue of $5.95 billion with earnings of 8 cents a share. According to a company statement, Cisco now expects earnings "in the very low, single-digit range." Cisco said the economic malaise in the United States is spreading to the rest of the world. The networking products company will take a $2.5 billion excess inventory charge during the third quarter and a restructuring charge of $800 million to $1.2 billion. The restructuring charge is made up $300 million to $400 million in workforce reductions of 6,000 permanent employees and 2,500 temp or contract workers, of $300 million to $500 million in consolidation of excess facilities, and $200 million to $300 million in asset impairment charges. In the fourth quarter, revenue is expected to be flat to a decline of 10 percent sequentially. Shares of Cisco closed down 78 cents, or 4.3 percent, at $17.20. Currently, shares are halted and slated to reopen at 4:30 p.m. Eastern.
Cisco Systems (CSCO) said third-quarter revenue will be $4.69 billion, or a decline of 30 percent from the previous quarter's revenue of $6.7 billion. Analysts surveyed by First Call/Thomson Financial had expected revenue of $5.95 billion with earnings of 8 cents a share. According to a company statement, Cisco now expects earnings "in the very low, single-digit range." Cisco said the economic malaise in the United States is spreading to the rest of the world. The networking products company will take a $2.5 billion excess inventory charge during the third quarter and a restructuring charge of $800 million to $1.2 billion. The restructuring charge is made up $300 million to $400 million in workforce reductions of 6,000 permanent employees and 2,500 temp or contract workers, of $300 million to $500 million in consolidation of excess facilities, and $200 million to $300 million in asset impairment charges. In the fourth quarter, revenue is expected to be flat to a decline of 10 percent sequentially. Shares of Cisco closed down 78 cents, or 4.3 percent, at $17.20. Currently, shares are halted and slated to reopen at 4:30 p.m. Eastern.
