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Cisco posted a drop in first-quarter net earnings on Wednesday as revenue at the networking equipment company grew less than expected.
The Silicon Valley company, which is facing increased competition from competitors such as China’s Huawei, said its profits dropped 5 per cent to $2 billion from $2.09 billion in the year-ago quarter. Revenue grew 2 per cent to $12.09 billion.
In a conference call, Cisco said that sales grew less than expected due to weak demand in emerging markets, China, the United States and southern Europe. The company predicted a weaker-than-expected outlook for its second quarter, sending shares down some 10 per cent in after-hours trading.
“While our revenue growth was below our expectation, our financials are strong, our strategy is strong, and our innovation engine is executing extremely well,” Cisco chief executive John Chambers said.
“We remain confident in our long-term goal to be the number-one IT company in the world and help our customers solve their biggest business problems.”
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