Menu
Stock-market jitters have rocked network spending, Cisco says

Stock-market jitters have rocked network spending, Cisco says

Some enterprises waited to buy new campus gear when they saw things get shaky in January

The world's financial markets got off to such a rough start this year that some enterprises froze plans to upgrade their campus networks.

After oil prices and stock markets around the globe plunged during the first trading days of the year, there was a slowdown in spending that hurt Cisco Systems results and colored its forecast for the current quarter, CEO Chuck Robbins said Wednesday.

"You see customers say, 'I want to just wait, see what's going on,'" Robbins said on a conference call about Cisco's fiscal second quarter, which ended Jan. 23.

The report was a reminder that what happens in financial markets can echo in IT departments if business management fears shrinking sales or a falling stock price ahead. Cisco has a different financial calendar than most other IT companies and is one of the first to report on a quarter that spilled over into this calendar year. It's the world's dominant supplier of networks.

The quarter was going according to the company's expectations until its final three weeks, Robbins said. The "pause" most affected spending on campus networks, the systems that connect servers and data centers to desktops and, increasingly, mobile devices.

"Where they had the option to wait, they chose to wait a bit," he told financial analysts. Robbins didn't estimate how long the pause would last.

Fortunately for Cisco, spending on other key products didn't seem to be hit by the market jitters, the company said. While its switching revenue fell 4 percent from a year earlier, security rose 11 percent. Cisco is working to expand its portfolio from its traditional business of switches and routers to things like software, services and security.

Overall, the company's revenue rose just 2 percent from a year earlier, to $11.9 billion. Its profit was $3.1 billion, or $0.62 per share. Adjusting for things like the fact that Cisco sold its set-top box business late last year, the company reported results that were roughly in line with what analysts polled by Thomson Reuters had expected.

For the current quarter, which goes until late April, Cisco forecast revenue growth from a year earlier of between 1 percent and 4 percent. That's a wider range than the company usually gives because of the economic volatility it's seen so far this year, CFO Kelly Kramer said.

Subscribe here for up-to-date channel news

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Featured

Slideshows

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards

Revealed at a glitzy bash in Sydney at the Ivy Penthouse, the first StorageCraft Partner Awards locally saw the vendor honour its top-performing partners with ASI Solutions, SMBiT Pro, Webroot, ACA Pacific and Soft Solutions New Zealand taking home the top awards. Photos by Maria Stefina.

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards
Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip

Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip

​Synnex and Lenovo hosted 18 resellers for an action-packed weekend adventure in RotoVegas, taking in white water rafting on the Kaituna River, as well as quad biking and dinner at Stratosfare​, overlooking Lake Rotorua at the top of Mount Ngongotaha​. Photos by Synnex.

Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip
Show Comments