Why Cisco Systems Stock Is Tumbling Thursday

Cisco Systems Inc CSCO shares are trading lower Thursday after the company reported fiscal first-quarter results and issued weak guidance. 

• Q1 Revenue: $14.67 billion beat estimates of $14.62 billion
• Q1 EPS: $1.11 beat estimates of $1.03

Total software revenue and software subscription revenues were up 13% year-over-year. Total annualized recurring revenue came in at $24.5 billion, up 5% year-over-year. Remaining performance obligations totaled $34.8 billion, up 12% year-over-year.

Cisco noted that it saw a slowdown of new product orders in the first quarter. The company believes the slowdown was due to customers being focused on installing and implementing products following exceptionally strong product delivery over the past three quarters.

"After customers implement large amounts of recently shipped product, we expect to see product order growth rates accelerate in the second half of the year," said Scott Herren, CFO of Cisco.

Guidance: Cisco expects second-quarter revenue to be between $12.6 billion and $12.8 billion versus estimates of $14.19 billion. Cisco sees second-quarter adjusted earnings in a range of 82 cents to 84 cents per share versus estimates of 99 cents per share.

Cisco cut full-year 2024 revenue expectations from $57 billion to $58.2 billion to a new range of $53.8 billion to $55 billion. The company also cut full-year earnings from a range of $4.01 to $4.08 per share to a new range of $3.87 to $3.93 per share.

Following the print, Rosenblatt analyst Mike Genovese maintained Cisco with a Neutral rating and lowered the price target from $59 to $51.

See Also: Marathon Petroleum, Snowflake And 2 Other Stocks Insiders Are Selling

CSCO Price Action: Cisco shares were down 9.83% at $48.04 at the time of writing, according to Benzinga Pro.

Photo: Fred Romero from Flickr.