Cisco Drops 5% After Forecast Shows Revenue Decline Increasing

Cisco Systems Inc. shares dropped in late trading Wednesday after the networking giant said revenue would decline at a faster rate in the current quarter. Cisco beat earnings estimates for its fiscal third quarter, reporting net income of $2.52 billion, or 50 cents a share, on sales of $11.94 billion. After adjusting for stock-based compensation and other effects, Cisco claimed earnings of 60 cents a share. Analysts on average expected adjusted earnings of 58 cents a share on sales of $11.9 billion, according to FactSet. The company said that revenue for the current quarter would decrease 4% to 6% year-over-year, however, after a 1% decline in the previous quarter. That suggests a revenue total of $11.9 billion to $12.1 billion, while analysts were forecasting a sales total of $12.5 billion on average, according to FactSet. Cisco said it expects adjusted earnings in a range of 60 cents to 62 cents a share for the current quarter, while analysts expect 62 cents a share on average. Cisco stock fell more than 5% in late trading after closing with a 1.4% decline at $33.83. Shares have gained 27.2% in the past year, while the S&P 500 index has increased 17.3% in that time.