Cisco (NASDAQ: CSCO) shares fell 17% after the market close on Wednesday following the company’s mixed third-quarter earnings.
“We continued to see solid demand for our technologies and our business transformation is progressing well,” said Chuck Robbins, chair and CEO of Cisco. “While Covid lockdowns in China and the war in Ukraine impacted our revenue in the quarter, the fundamental drivers across our business are strong and we remain confident in the long term.”
The multinational technology conglomerate corporation reported earnings of USD0.87 per share, compared to the expected USD0.86 a share. Meanwhile, revenue amounted to USD12.84 Billion, lower than analysts anticipated USD13.34 Billion.
“We delivered healthy earnings despite unanticipated disruptions through strong pricing and disciplined spend management,” said Scott Herren, CFO of Cisco. “Our product backlog is well over $15 billion and product ARR and RPO again grew double digits. The continued progress in our business model transformation reflects the success of our strategy and underpins our long-term confidence.”
The invasion of Ukraine had cut the company’s revenue by USD200 Million, added USD5 Million to its cost of sales within the quarter as well as USD62 Million in operating expenses. Furthermore, the recent Covid-19 lockdowns in China have incentivized component shortages, according to CEO Chuck Robbins.
Cisco shares have tumbled 23% throughout the year and have a current market cap of USD172.73 Billion.