Investing.com – Cisco stock (NASDAQ:CSCO) traded 1.2% lower in Thursday’s premarket after the company warned that tight supply chains will keep costs high for at least first half of the financial year.
"Looking ahead, we expect the supply challenges and cost impacts to continue through at least the first half of our fiscal year and potentially into the second half," Chief Executive Officer Chuck Robbins told analysts, according to Reuters.
The maker of network gear and Webex teleconferencing systems expects 2022 profit per share between $3.38 and $3.45. Revenue is seen growing between 5% and 7%.
Shortage of chips and critical hardware over the last 6-12 months has increased costs for manufacturers as demand has boomed and supply chains have been constrained. While the pandemic has boosted demand for digital devices that house these components, lockdowns have forced factories to stay shut, thus hurting supplies.
Cisco’s revenue of $13.1 billion was higher by 8% year-on-year and topped the analyst estimate of $13.04 billion, thanks to high demand for its teleconferencing systems from people forced to work remotely.
Adjusted earnings per share of 84 cents also surpassed the estimate of 82 cents.