Can Cisco Possibly Get Any Worse?

Cisco again landed on the trader radar after the tech company lowered its long-term sales forecast on Tuesday, acknowledging that its days of heady growth won’t return in the foreseeable future.

Chief Financial Officer Frank Calderoni told analysts and investors at a meeting in San Jose, Calif. that Cisco, the world’s largest maker of computer networking equipment, now expects sales to grow 5 percent to 7 percent per year for the next three years.

The company’s long-term target has been for annual revenue growth of 12 percent to 17 percent. That was easily achievable for a decade, as the Internet boomed. But its sales have grown by only 9 percent per year in the last four years, due to competition and the slow economy.

The disappointing outlook comes amid a drastic reorganization.

The company has cut 6,500 jobs this year, and has gone from trying to expand into more than a dozen markets to focusing on five core areas. In the process, it has shut down its Flip Video unit, which made popular consumer camcorders, and trimmed its other consumer businesses. Speculation is also swirling that long-serving CEO John Chambers might be the next victim of Cisco’s shakeup.

For more details check out our interview with UBS analyst Nikos Theodosopoulos. Watch the video now!

Read More:
Cisco Cuts Long-Term Sales Growth Forecast





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