Cisco Systems Inc (CSCO.O) forecast adjusted profit for the current quarter below analysts’ estimate, sending shares of the world’s largest networking gear maker down more than 4 percent in extended trading.
The company’s traditional business of switches and routers has struggled with slowing demand from telecom carriers and increasing competition from companies such as Juniper Networks Inc (JNPR.N) and China’s Huawei [HWT.UL].
Revenue from Cisco’s switching business fell 7 percent to $3.72 billion in the first quarter ended Oct. 29.
Cisco said on Wednesday it expected an adjusted profit of 55-57 cents per share for the second quarter, lower than analysts’ average estimate of 59 cents, according to Thomson Reuters I/B/E/S.
Chief Executive Chuck Robbins, who took over from company veteran John Chambers in July last year, has been steering Cisco towards more software and subscription-based services.
The company said in August it would lay off about 5,500 employees, beginning in the first quarter, and that savings from the cuts would be reinvested into key growth areas such as security, the Internet of Things and cloud.
Cisco said on Wednesday it recorded a pretax charge of $411 million related to the restructuring.
The company’s said net profit fell to $2.32 billion, or 46 cents per share, in the latest quarter, from $2.43 billion, or 48 cents per share, a year earlier.
Excluding items, the company earned 61 cents per share.
Revenue fell 2.6 percent to $12.35 billion.
Analysts on average had expected a profit of 59 cents and revenue of $12.33 billion.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila)