BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 



The BBC's Patrick O'Connell
"Cisco's statement is severe"
 real 56k

Natwest Stockbrokers, Jeremy Batstone
"Investors are still hoping for the best"
 real 28k

Tuesday, 17 April, 2001, 06:25 GMT 07:25 UK
Cisco warns of lower earnings
john chambers cisco chief executive
'Difficult business decisions': Cisco's John Chambers
Silicon Valley's largest company, Cisco Systems, issued a profits warning after Wall Street closed on Monday.

The tech giant, the worldwide leader in networking for the internet, said that sales for the third quarter would come in 30% lower than the previous three months.


This may be the fastest any industry our size has ever decelerated


John Chambers, Cisco chief executive

The firm also announced plans to layoff 8,500 people, about 1,000 more than it previously said last month.

The company said that the business environment had "never been more challenging".

Sales for the third quarter would be down about 30% from the second, when they reached $6.7bn (4.66bn).

The company said it expected its sales for the fourth quarter to range from flat to a fall of 10%.

Cisco blamed "global economic challenges, the slowdown in the global telecom market and the deceleration in corporate information technology spending" for its troubles.

"This may be the fastest any industry our size has ever decelerated, which has required us to make difficult business decisions at unprecedented speed," said Cisco chief executive John Chambers.

Industry slowdown

High tech stocks have plunged in recent months because of the slowdown in the US economy and a slump in spending by firms on information technology.

Lucent Technologies, Nortel Networks and Cisco's other rivals have all either announced huge job cuts or have issued profits warnings.

And more are expected this week, with a slew of firms reporting earnings.

"My real concern is not about Cisco," said one analyst.

"Relatively speaking, the company will do well, but if relatively well is having revenue difficulties to this order of magnitude, then it is troubling for the industry".

Cisco shares were reaching $15.90 in after hours trading on Monday, having closed on the Nasdaq at $17.20, where they had dropped 78 cents, or more than 4%.

The stocks have plunged from a year high of nearly $72.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

17 Apr 01 | Business
Q&A: What's gone wrong with Cisco?
26 Mar 01 | Business
Cisco sees downturn continuing
09 Mar 01 | Business
Silicon Valley giant cuts jobs
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories