Cisco expects revenue growth as pressure on supply chain eases

The networking major expects current-quarter revenue to rise between 2% and 4%

Cisco Systems Inc. has given an optimistic forecast for the first-quarter sales as COVID-19 recovery in China eases supply chain shortages and helps it meet the demand for networking hardware, sending the company's shares 5% higher in extended trading. The results announced on Wednesday suggest networking equipment makers have started overcoming the component crunch that had kept them from tapping a post-pandemic revival in digital infrastructure spending. "After a challenging April due to the COVID-related shutdowns in Shanghai overall supply constraints began to ease slightly at the back half of the fourth quarter and continuing into the start of Q1," Chief Executive Chuck Robbins said on a post-earnings call.

The networking major expects current-quarter revenue to rise between 2% and 4%, while analysts predicted it would remain flat, according to Refinitiv IBES data. Annual revenue is forecast to jump 4% to 6%. "The guide was good enough because they started lapping more robust year-ago numbers. So the guide for the year and quarter are seen as a sign of confidence by the company," Elazar Advisors analyst Chaim Siegel said.