By Aaron Tilley
Cisco Systems Inc. said global economic uncertainties have slowed technology investments decisions at some companies, denting the network-equipment giant's sales growth.
The router maker, seen as a proxy for hardware demand from corporations, on Wednesday said it expects revenue to drop between 1.5% and 3.5% in its current quarter. The decline would come on top of a 3.5% year-over-year drop in revenue for the company's fiscal second quarter, which ended Jan. 25.
"We are seeing longer decision-making cycles across our customer segments for a variety of reasons including macro uncertainty as well as unique geographical issues," Chief Executive Chuck Robbins told analysts.
The muted outlook for the current quarter doesn't reflect potential supply chain disruptions from the Coronavirus outbreak that has hit China. "We will continue to monitor the situation closely," Mr. Robbins said.
Shares in Cisco fell more than 4% after the bell.
Overall, Cisco reported $12 billion in revenue for the latest period, compared with $12.45 billion the year earlier. The latest results beat analysts' forecasts.
Cisco's infrastructure-platforms business, covering its main networking hardware and software products, reported an 8% decline in sales to $6.53 billion in the latest quarter.
The company's applications unit, which includes videoconference and tools for monitoring various applications, generated $1.35 billion in revenue, also down 8%.
Revenue fell 5% in the company's Americas region and 1% in the region including China and Japan.
San Jose, Calif.-based Cisco reported a quarterly net income of $2.88 billion, or 68 cents a share, up from $2.82 billion, or 63 cents a share, the year earlier. Its adjusted profit of 77 cents a share was a penny higher than analysts polled by FactSet predicted for that metric.
Operating expenses fell to $4.38 billion from $4.56 billion, Cisco said. Lower general and administrative costs and less restructuring and other charges helped results.
Cisco also predicted it would earn a profit, following adjustments, of 79 cents to 81 cents a share in its current fiscal quarter.
Some of the political uncertainties that may have slowed investment decisions appear to be fading, Mr. Robbins said. A U.S. trade deal with China agreed last month and greater clarity on the U.K.'s split from the European Union are providing companies more clarity about the future, he said, "so hopefully we'll see our customers pick up again."
--Micah Maidenberg contributed to this article.
Write to Aaron Tilley at firstname.lastname@example.org