Dive Brief:
- On Friday, Cisco forecast adjusted profit and revenue growth for the second quarter below analysts' estimates.
- The company said it’s experiencing a slowdown in order growth and weakness in its enterprise business outside the U.S.
- Cisco has been working to build its enterprise and wireless security businesses to counter lower spending by its traditional customers.
Dive Insight:
Chief Executive Officer Chuck Robbins said a strong dollar is hurting demand for enterprise products overseas.
"Our guidance reflects lower-than-expected order growth in the first quarter, driven largely by the uncertainty of the macro environment and currency impacts," Robbins said.
Cisco said it expected adjusted profit of 53-55 cents and revenue to be flat at $11.94 billion-$12.17 billion. Analysts had expected a profit of 56 cents on revenue of $12.55 billion.
The company has been making moves to shift its focus to new areas, such as IoT and security. In October, it announced it would buy ParStream, a German-based developer of database analytics tools for IoT environments and network security company Lancope Inc. to boost its security business. Last week, the company said it would partner with Ericsson to make next generation networks that should generate additional revenues of $1 billion for each company by 2018.
