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Cisco slows down
The company known as a bellwether for the technology sector beats analysts' expectations but warns of tough times ahead.
Everyone looks to Cisco to get a gage how the technology sector is doing. But even mighty Cisco can’t predict the future.
On the company’s recent earnings call, CEO John Chambers told investors that he doesn’t know how long this economic downturn will last, through 2009 or into 2010. He also said that while he is pretty confident the company is going to be able to avoid major layoffs. Should the economy continue to deteriorate, they may have to cut as much as 10 percent of the workforce. So he kind of left the door open to layoffs should that be necessary.
A lot of other companies have avoided giving any guidance in light of the shaky economy and a lot of unknown conditions, but Cisco at least tried to give some indication of what’s to come. It’s not looking so pretty though, they did say that in their current quarter they expect revenue to be down as much as 20 percent. It wasn’t quite as bad as investors expected in this most recent quarter though.
Cisco managed to beat analysts’ estimates on both revenue and earnings. But at the same time, Chambers told investors that he’s going to have to cut about a billion dollars from the company’s expenses by limiting travel budgets, putting a hiring-freeze in place and cutting back on other special projects.
One thing is totally clear here, while last year when Chambers was describing market demand for the company’s products, he used words like “soft and lumpy”, this year he is using much stronger language. He told investors on this earnings call that it is now clear that we are in a global economic downturn.
GLOSSARY
1. gage vt.以...為擔(dān)保, 以...為賭注n.(=gauge) 標(biāo)準(zhǔn)度量, 計(jì)量器
2. Earnings Calls： ~are a teleconference in which a public company discusses the financial results of a reporting period. These companies will announce earnings quarterly and generally hold an earnings call quarterly.
3. in light of adv.按照, 根據(jù) 考慮到
4. beat sb’s estimate/expectation 超出某人預(yù)期
5. hiring-freeze 招聘中止/凍結(jié)
6. lumpy adj.多塊狀物的, 粗笨的 不容樂觀的
