Cisco said orders in its public sector business, which includes sales to federal, state and local governments, fell 4% in the third quarter ended April 29.
But the future isn't quite as bright as Wall Street hoped: Cisco said it expects revenues to fall 4 percent to 6 percent year-over-year in the fourth quarter, with earnings of 60 cents to 62 cents per share, adjusted. The company also announced they were expanding the number of employees that would be affected by the restructuring plan initially announced in August, according to the Associated Press.
The cuts come on top of the 5,500 job cuts, or 7 percent of its workforce, announced in August 2016, the enterprise technology company said. We expect to recognize approximately $150 million to $200 million of pretax charges under this plan in the fourth quarter of fiscal 2017.
On an analyst conference call transcribed by Seeking Alpha marking the end of Cisco's fiscal third quarter, Robbins reiterated the supplier's focus on delivering value through secure, software-defined, automated and intelligent networks. Demand for Cisco's routers has also remained weak, contributing to the company's sixth straight decline in revenue.
Chuck Robbins, CEO, Cisco, said: "I am pleased with the progress we are making on the multi-year transformation of our business". Non-GAAP earnings were 60 cents per share on a revenue of $11.9 billion, down 1 percent year over year.
Chief Executive Chuck Robbins admitted that it was a pretty significant stall right now with the lack of budget visibility.
Cisco reported in-line financial results Wednesday but its shares took a hit following a lower than expected revenue outlook. As a matter of fact, the sharp decline in the Dow Jones Industrial Average (DJIA) on Wednesday is being blamed on Trump, who the day before was accused of asking former FBI Director Comey to drop the investigation of Michael Flynn. Cisco's revenue in Asia Pacific including Japan, China and India fell 2 percent to $1.89 billion. Notably, Cisco's Service Provider Video segment revenue plummeted 30% to $207 million in the period. In the United Kingdom business is being dampened by currency issues.