OPINION: Cisco blamed its outlook woes on supply-chain problems, but overall tech demand as the market tanks could become a bigger issue, writes columnist tpoletti.
Cisco Systems Inc. executives spent much of Wednesday afternoon blaming the COVID-related shutdowns in China for a $1 billion shortfall in its revenue forecast, but the tech bellwether could be showing wider problems.
Executives said that their forecast was 100% related to their supply issues, saying there was no demand impact in their fiscal fourth-quarter guidance. Those supply issues should affect hardware sales, as Cisco is struggling to get the components it needs to complete the equipment and ship it. But some analysts noted Thursday that the company’s supply-chain issues were more problematic than its rivals, such as Arista Networks, because Cisco has not diversified its supply chain as much. Neither Arista ANET, -1.43% nor Juniper Networks JNPR, -3.52% had as big an issue in their most recent quarters, which ended March 31, because of more diversification.
One analyst asked what Cisco executives are hearing from customers, “because it seems like everywhere you look it is bad news.” Chief Executive Chuck Robbins stuck to his talking points, however — digital transformation can’t be stopped, Shanghai will reopen June 1 and Cisco will be just fine.
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