Cisco Outlook Takes Toll On Markets - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Cisco Outlook Takes Toll On Markets

The networking equipment maker's disappointing outlook for the first quarter helped send stocks lower.

A pair of cautious outlooks in the tech sector weighed heavily on Wall Street Wednesday. Warnings from Cisco Systems and National Semiconductor generated a tech sell-off that sent the Nasdaq to its lowest level in a year.

The markets opened considerably lower on pressure from Cisco. After the closing bell Tuesday, the network equipment maker reported higher fourth-quarter sales and profits but expressed some doubt about business for its first quarter.

Cisco surprised investors by saying it expects fiscal first-quarter sales to come in flat to 2% above fourth-quarter numbers, the low end of Wall Street's expectations. For the quarter ended July 31, Cisco earned $1.38 billion, or 20 cents a share, up from $982 million, or 14 cents a share, in the year-ago quarter, on sales of $5.9 billion. Though the company beat earnings expectations, its cautious outlook on corporate technology spending rattled investors, and several brokerage firms downgraded the stock. Cisco fell 11%, or $2.17, to $18.29.

"For such a good quarter, you'd expect them to have something better to say about the future," David Willis, a Meta Group analyst, told The Associated Press. "Characteristic of Cisco, they refused to do that and were actually talking more cautiously about the future."

National Semiconductor fell $2.20, or 14%, to $13.50, after it said revenue for the current quarter is likely to miss forecasts because of a drop in orders. Those remarks raised alarms among analysts about prospects for the chip sector.

A late-day rally helped most key indexes reduce their losses after a sluggish start. The InformationWeek 100 fell 6.51 points, or 2.4%, to 266.78. The Nasdaq composite index fell 26.28 points, or 1.5%, to 1,782.42. The Dow Jones industrials fell 6.35 points, or 0.6%, to 9,938.32, and the Standard & Poor's 500 index fell 3.25 points, or 0.3%, to 1,075.79. The Nasdaq-100 tracking stock fell 29 cents, or 0.9%, to $32.92 as more than 121.8 million shares changed hands.

See the full listing of all the companies in the InformationWeek 100 and the top 5 percentage winners and losers for the last closing at

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
11 Things IT Professionals Wish They Knew Earlier in Their Careers
Lisa Morgan, Freelance Writer,  4/6/2021
Time to Shift Your Job Search Out of Neutral
Jessica Davis, Senior Editor, Enterprise Apps,  3/31/2021
Does Identity Hinder Hybrid-Cloud and Multi-Cloud Adoption?
Joao-Pierre S. Ruth, Senior Writer,  4/1/2021
White Papers
Register for InformationWeek Newsletters
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
Current Issue
Successful Strategies for Digital Transformation
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Flash Poll