Cisco falls on dismal outlook as supply shortage bites

　　div classBodysc17zpet90 cdBBJodivpReuters – Cisco Systems Inc shares were down 10 premarket on Thursday after the company warned of persisting shortages in components, triggering price target cuts from at least nine brokerages as Wall Street braces for further impact on technology exports due to Chinas COVID restrictions.p

　　pCisco missed quarterly sales estimates and lowered its fullyear growth forecast, which dragged down shares of peers Juniper Networks, F5 Inc and Arista Networks down 2.6 to 7 before the bell. pdivdivdiv classBodysc17zpet90 cdBBJodiv

　　pEnterprisefocused firms such as Cisco, which benefited as companies spent to upgrade technology infrastructure to incorporate hybrid work, have faced challenges due to a shortage in components which has worsened since key supply hub China implemented stringent COVID lockdowns in April.p

　　p“FY23 is set up to be more about supply than demand, even as orders will likely decline on tough comps,” said JP Morgan lead analyst Samik Chatterjee, adding that Ciscos order backlog of 15 billion provides some support.p

　　pThe San Jose, Californiabased company took a 200 million hit after ceasing operations in Russia and Belarus last quarter and forecast a decrease of 1 to 5.5 in currentquarter revenue, partly due to slower imports of key components from China.p

　　pMeanwhile, analysts flagged rising competition. p

　　pSoftware business seems to be underperforming while “core enterprisecommercial of the core hardware business appears to be donating share to competitors,” Piper Sandler lead analyst James Fish wrote in a note.p

　　p

　　pp Reporting by Yuvraj Malik in Bengaluru Editing by Krishna Chandra Elurip

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