Tech bellwether Cisco Systems Inc. posted lower-than-expected revenue for its fiscal first quarter on Wednesday and warned that its revenue for the current period could fall as much as 10 percent from a year ago.
Cisco's shares tumbled 11 percent in extended trading after the company gave its guidance. In August, Cisco had forecast revenue growth of 3 percent to 5 percent for the current quarter.
"Our team there did an exceptional good job managing through this challenging period," said CEO John Chambers in a conference call with analysts. "However, the shutdown, debt ceiling negotiations and delay of key decisions exasperated the lack of confidence among business leaders we had highlighted over the past few quarters."
Cisco earned $2 billion, or 37 cents per share, during the quarter ended Oct. 26. That's down 5 percent from $2.09 billion, or 39 cents per share, a year earlier.
Revenue grew 2 percent to $12.09 billion from $11.88 billion.
Adjusted earnings, which exclude acquisition-related costs, stock-based compensation expense and other items, totaled $2.9 billion, or 53 cents per share — 2 cents above Wall Street's expectations.
Analysts expected higher revenue of $12.35 billion, according to a poll by FactSet.
"Our business continues to operate in an inconsistent and mixed (economic) environment," said Financial Chief Frank Calderoni in a conference call with analysts, adding that Cisco also has "specific challenges" in emerging markets and in its service provider business, which includes television set-top boxes.
For the full fiscal year, Cisco said it expects adjusted earnings of $1.95 to $2.05 per share, below analysts' forecast of $2.10 per share.
Cisco also expanded its share repurchase program by $15 billion, bringing the total authorization for buybacks to $16.1 billion.
Cisco's performance is widely regarded as a bellwether for the technology industry because company cuts a broad swath, selling routers, switches, software and services to corporate customers and government agencies. In addition, its fiscal quarters end a month later than most other major technology companies, giving it more time to assess economic conditions.
Shares of San Jose, Calif.-based Cisco fell 87 cents, or 3.6 percent, to $23.13 in after-hours trading. The stock had closed regular trading up 27 cents at $24.