US giant Cisco Systems last night reported fourth-quarter earnings of two cents a share, matching Wall Street analysts' expectations.
Cisco's Chief Executive Officer John Chambers said that the company's growth will be flat to down 5% in the coming quarter. He also forecast that the technology sector will continue to decline.
The results represent a sharp drop from the 16 cents per share the company reported in the fourth quarter of last year. The company said its fourth-quarter profits fell by 86% as the technology sector continued to stay in a financial slump.
Chambers said in a statement that the figures reflect 'an extremely challenging second half of the year.' He said the company, however, was starting to develop early momentum in its core markets, the sale of routers and switches that comprise the hardware of the Internet. The company has an Irish workforce of about 50.
Cisco reported fourth-quarter earnings that closely track analysts' expectations, coming in at $4.298 billion, against an average prediction of $4.299 billion. The company also reported a sales drop of 25% to $4.3 billion, down from $5.72 billion in the same quarter last year.
These latest results illustrate the decline in both Cisco's results and those of the technology sector since mid-2000, after the company surpassed Microsoft as the world's most valuable corporation in March 2000. Its market capitalisation was valued at $555 billion, with Cisco shares hovering just under $80 each when investors decided to pull the plug on technology companies in September.
Company stock has been on a decline ever since, with no real signs of a reversal. As a result, brokers like Merrill Lynch have warned clients that companies like Cisco face an environment that 'continues to be challenging.'
Chambers said Cisco was being hit with slowdowns in computer network purchases and upgrades that have spread through a number of sectors, including financial, retail and transportation markets.
He said the company is seeing these slowdowns ripple throughout the world, especially in Europe and Asia, where Cisco's business has been 'more challenging.' Cisco's CEO told analysts that Nordic countries, the Middle East and parts of Southern Europe seem to be avoiding the economic slump, while the economic landscape in Japan will 'get tougher before it gets better.'
