Cisco warns of big sales drop in
Published: Thu, Nov. 06, 2008 12:30AM
Modified Thu, Nov. 06, 2008 02:04AM
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closeNEW YORK -- Cisco Systems, the world's largest maker of computer networking gear, warned Wednesday that orders fell off abruptly in October and projected a large fall in sales in the current quarter.
CEO John Chambers said he expects revenue to drop 5 percent to 10 percent in the current quarter, which began Oct. 26. That would mean revenue between $8.85 billion and $9.34 billion, well below the $10.4 billion expected by analysts.
Cisco is the first major technology company to include results for October and is considered a technology bellwether.
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Chambers said the revenue projection assumes that the order level of October holds through the end of the quarter. He said the business slowdown in the U.S. spread to Europe, emerging markets and Asia in the latest quarter.
The company plans to cut $1 billion from its annual costs by the end of its fiscal year, by pausing hiring and cutting marketing and travel, he said. Cisco employs about 4,400 workers at its campus in Research Triangle Park, one of its biggest global operations.
Cisco shares fell 94 cents, or 5.1 percent, to $17.39 in regular trading Wednesday. For the latest quarter, earnings were essentially flat.
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