Cisco stock plunges over 8% on weak revenue and disappointing outlook

Cisco (CSCO.US) stock tumbles more than 8.0% after the networking hardware company reported quarterly revenue that fell short of analysts’ expectations and issued weaker-than-expected guidance. The tech giant's first quarter earnings rose 8% to 82 cents a share from a year earlier, slightly above market forecasts of 81 cents a share. Revenue increased 8% to $12.9 billion, including acquisitions. A year earlier, Cisco earnings were 76 cents a share on sales of $11.96 billion. However Wall Street expected earnings of on revenue of $12.99 billion.

Also for the current-quarter company expects that revenue growth will not match analysts' expectations, citing not only the semiconductor shortage but also higher transport and logistics costs in its supply chain.  For the current quarter ending in January, the company forecasts earnings of 81 cents per share compared to analysts’ projections of 82 cents per share. For fiscal year 2022, the company forecasts 5% to 7% revenue growth and earnings of $3.38 to $3.45 a share, while analysts polled by Refinitiv were looking for earnings of $3.42 per share and $52.87 billion in revenue, which would equal 6.1% growth.

Cisco (CSCO.US) stock launched today's session with a bearish price gap, below long-term upward trendline. Initially buyers tried to push the price higher, but were unable to break above resistance at $53.70 which coincides with 200 SMA (red line) and 23.% Fibonacci retracement of upward wave launched in March 2020. If current sentiment prevails, support at $49.50 may be at risk. This level is strengthened by 38.2% Fibonacci retracement. Source: xStation5