Cisco: Supply chain Problems Compress Gross Profit margin …

Network equipment industry giant Cisco (Cisco Systems, Inc.) announced the third quarter of the 2021 fiscal year (as of May 1, 2021) after the US stock market on the 19th: annual revenue increased by 7% to US$12.8 billion. Non-GAAP gross profit margin reported 66.0%, non-GAAP diluted earnings per share increased by 5% to 0.83 US dollars.

NBC reported that according to a Refinitiv survey, analysts expect Cisco’s third-quarter revenue and non-GAAP diluted earnings per share to be US$12.56 billion and US$0.82, respectively.

Cisco estimates that this quarter’s revenue will increase by 6-8% annually to 12.93 billion to 13.18 billion U.S. dollars (median value of 13.055 billion U.S. dollars), and non-GAAP diluted earnings per share will range from 0.81 to 0.83 U.S. dollars (median value of 0.82 U.S. dollars) , Non-GAAP gross profit margin is estimated to be 64%~65%.

According to Refinitiv’s survey, analysts expect Cisco’s fourth-quarter revenue and non-GAAP diluted earnings per share to be 12.82 billion U.S. dollars and 0.85 U.S. dollars.

Through the stock repurchase program (currently there is still an unused quota of US$8.7 billion), Cisco bought back approximately 10 million common shares of its own company at an average price of US$48.71 per share in the third quarter of fiscal year 2021.

In addition, Cisco paid a total of $1.6 billion ($0.37 per share) in cash dividends to shareholders.

Cisco Chief Executive Chuck Robbins pointed out in the 19th earnings press release that as customers accelerate the adoption of hybrid work styles, digital transformation, cloud computing and continued vigorous adoption of subscription services, Cisco is confident in its strategy and ability to lead the next phase of recovery. .

Cisco pointed out through the financial report conference presentation that the gross profit margin in the third quarter of fiscal year 2021 is under pressure due to supply chain challenges.

Barron’s reported that Robbins pointed out on the earnings call that Cisco expects supply chain issues to continue at least until the end of December this year. He also said that although Cisco has increased the prices of some products, in order to improve long-term relationships, the company will focus on ensuring that shipments to customers are safe.

Robbins pointed out that if it were not for the delay in solving the supply chain problems, the revenue forecast for this quarter would be higher. He said that Cisco is facing higher component costs and freight costs.

Cisco (CSCO.US), a component of the Dow Jones Industrial Average, fell 0.87% on the 19th to close at $52.47, and is up 17.3% so far this year.

Cisco fell 5.47% to 49.60 US dollars after the market on the 19th.

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