Cisco, perhaps the high tech industry’s last-stnding bellweather, reported earnings 27% lower in the latest quarter over the same quarter last year. The good news is analysts had expected losses to be worse.
Chairman John Chambers described loss momentum building to the back end of the quarter and suggested the near term outlook calls for more pain. In November, Cisco’s orders were down 9% from the year before. In January, the drop was 20%. Chambers projected a 15% to 20% drop in revenue in the current quarter.
Cisco’s numbers are significant in that a) it is the largest maker of computer networking gear in the world; b) 80% of its revenue comes from sales, rather than recurring service contracts; and c) the company reports nearly a month after other technology companies report their quarterly results, meaning Cisco’s today can look like a whole lotta companies’ tomorrow.