Cisco CEO speaks of "difficult quarters"
US network equipment supplier Cisco remains optimistic over the long term despite the crisis on financial markets. In a conversation published by German economics daily Handelsblatt, CEO John Chambers said there was no reason to change the current forecast. He told the paper that the long-term goal of 12 to 17 per cent growth per annum remains unchanged. Overall, he said he is optimistic about the US economy although the country faces "a few difficult quarters".
In February, Chambers put a damper on expectations. When presenting the figures for the second quarter, Cisco's CEO warned that growth might slow down; he reduced the forecast from 15 to 10 percent. Cisco paid the price for this announcement on the stock market. Since reaching a high for the year in November of 2007, the firm has lost a third of its shareholder value.
Analysts do not yet agree about whether Cisco can weather the crisis in the US. Sceptics argue that the company is especially vulnerable to a crisis as a supplier of network equipment because it will suffer from a drop in investments within the general national economy. Furthermore, exports have not been able to compensate for the drop in sales on the US market. On the other hand, Wall Street has a lot of trust in Chambers' forecast. To bolster exports, Cisco's CEO recently announced that business in China would be expanded.
Global sales are still considered a way of counterbalancing the effects of the US crisis. Last week, Intel, IBM, and Google presented strong figures, thereby assuaging fears on Wall Street that the crisis would reach all the way into the IT sector. Cisco will be publishing its figures for the previous third quarter of the fiscal year on May 7.