Cisco sees downturn continuing

Cisco Systems chief executive John Chambers said the US downturn will continue for "at least three more quarters" and possibly longer.

Cisco, which makes internet hardware, is seen as a key indicator of the health of the high-tech sector and the wider US economy.

The company had previously said it expected the downturn to last for two quarters or more.

But Mr Chambers told the Financial Times that the outlook for the economy has deteriorated significantly since Cisco made that warning in January.

Uncertainty

He did not provide any warning on Cisco's profits, despite speculation in the market that Cisco will do so.

"We thought this downturn would last for two quarters.

"Now we are saying that it will last for at least three quarters," Chambers said.

"The slowdown that we saw in January is continuing in February and March.

"We have seen the issues expand to Asia-Pacific and we see the early signs in Europe," he said.

"Business leaders are making decisions based on real time data, while governments are making decisions based on data that often lags by one to three months, and old economy data rather than new economy data."

Mr Chambers' words will add to the uncertainty surrounding investors when stock markets open on Monday.