(Bloomberg) — Cisco Systems Inc. Inc., the largest maker of computer networking equipment, is in late trading after the company outlined advances in artificial intelligence and security technology, which helped ease concerns about slo
The company said sales will range between $57 and $58.2 billion in fiscal 2024. That compares with the $58.3 billion estimated by analysts on average, according to a Bloomberg survey.
Growth projections pale in comparison to the 11% jump in Cisco’s just-ended fiscal year. The company has seen a backlog of orders during a long period of component shortages. With those parts now available, Cisco has been able to ship hardware — and sell associated software — to meet pent-up demand. But that height is fading.
In Cisco’s fourth fiscal quarter, which ended July 29, revenue rose 16% to $15.2 billion. The profit, minus some items, was $1.14 per share. That compares with estimates of $15.1 billion in revenue and $1.06 per share of profits.
Robbins worked for years to reshape his company as a provider of networking software and services. His management team cites the amount of recurring revenue he’s accruing as an indicator of the success of the transition.
But Cisco still relies mostly on selling expensive pieces of network equipment — with proprietary software — and that makes it difficult to avoid fluctuations in demand from business customers. The company’s 11% increase in sales last year is expected to drop to just 2% this year.
In a common pattern with tech companies, artificial intelligence was a major topic of Cisco’s conference call. Cloud providers are racing to add computing power to handle services like OpenAI’s ChatGPT and Google Bard.
Robbins said Cisco will have a role in this lucrative market, without giving specific expectations about its size.
“This is a huge opportunity for Cisco,” Robbins said on the call. “We are laser focused on leading and winning in this field.”
(Updates with additional CEO notes beginning in the fourth paragraph.)
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