Networking giant Cisco Systems Inc. is looking for a slight increase in revenue in the next quarter, which would be its first advance since November 2019, but some of its core equipment companies are still plagued by the pandemic.
Tuesday, Cisco CSCO,
it reported slightly better-than-expected tax gains in the second quarter as it sees a “gradual improvement” in order growth in its commercial, public sector and service providers, which account for nearly three-quarters of its product orders. But he also said that the activity of companies and enterprises remained easy, due to the long sales cycles and spending breaks of companies during the pandemic.
Among the areas most affected by the pandemic, total product revenue was $ 8.6 billion, down 1%, and network infrastructure platforms down 3%.
WebEx video conferencing has once again demonstrated double-digit revenue growth as companies continue to use it for group video meetings while employees work from home.
While remote work is an advantage for Cisco video conferencing software, it causes delays in some network upgrade projects on corporate campuses. Cisco CEO Chuck Robbins said employees who will eventually return to the office will help their infrastructure sales, such as its switching and routing products, and its software-based networking service, called CAT 9000.
“I really think it’s going to be a hybrid, where people work from home and everyone lands here, where they work from home three days a week and work from the office two days a week and vice versa,” Robbins said. “The question is what accommodation spaces lead to customers, based on employees’ concerns about space issues, concerns about future pandemics or other concerns. We just don’t know that yet. ”
He added that some customers are also starting to upgrade to the next generation of WiFi, called WiFi 6.
The future of a hybrid job is likely to fuel this demand for WiFi 6, Robbins said. Many workers will continue to videoconference during office meetings, putting even more demands on corporate networks.
Cisco said it expects revenue in the third fiscal quarter to grow 3.5 percent to 5.5 percent year-over-year. The company’s guidelines include the fact that the third quarter will have an extra week, said Cisco’s new chief financial officer, Scott Herren, who has taken over from Kelly Kramer.
Investors were clearly hoping for more from Cisco, as their stock fell as the call progressed, with its shares down nearly 5% in after-hours trading. It looks like large network constructions or upgrades will continue to happen slowly, depending on needs, as long as most of corporate America still works from home.