Cisco Stock Plunges After Disappointing Results
Cisco Stock Plunges After Disappointing
Results
Cisco Systems Inc. released its fiscal second-quarter results Thursday, prompting the stock to plummet 12 percent early in the session. The company's gross margin, the percentasge of profit remaining after subtracting production costs, fell to just 62.4 percent for the period ended January 29th, short of the 63.3 percent analysts had forecast in a recent Bloomberg News poll.
The world's largest provider of networking equipment, Cisco boosted spending on research and development during the quarter by 19 percent, offsetting a 6 percent gain in revenue for the quarter. The company was also undercut by a number of companies selling comparable equipment at lower prices. The company's chief executive, John Chambers remarked that it would take some time for new products to reach a level of profitability seen in established products.
Cisco's forecast for profits this quarter, excluding certain items, also missed expectations. The company expects 35 to 38 cents per share profit, compared to an average of 40 cents predicted by analysts.
Cisco Systems Inc. released its fiscal second-quarter results Thursday, prompting the stock to plummet 12 percent early in the session. The company's gross margin, the percentasge of profit remaining after subtracting production costs, fell to just 62.4 percent for the period ended January 29th, short of the 63.3 percent analysts had forecast in a recent Bloomberg News poll.
The world's largest provider of networking equipment, Cisco boosted spending on research and development during the quarter by 19 percent, offsetting a 6 percent gain in revenue for the quarter. The company was also undercut by a number of companies selling comparable equipment at lower prices. The company's chief executive, John Chambers remarked that it would take some time for new products to reach a level of profitability seen in established products.
Cisco's forecast for profits this quarter, excluding certain items, also missed expectations. The company expects 35 to 38 cents per share profit, compared to an average of 40 cents predicted by analysts.
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