Cisco Systems Inc. showed stronger-than-expected resilience in its earnings Wednesday and shares went higher in after-hours trading, but the tech giant’s sales are declining amid the COVID-19 pandemic.
Analysts surveyed by FactSet had projected adjusted earnings of 71 cents a share on revenue of $11.9 billion on average, though those expectations have come down significantly since COVID-19 began to spread across the globe. Analysts expected adjusted earnings of 80 cents a share on sales of $12.7 billion at the end of 2019.
“The pandemic has driven organizations across the globe to digitize their operations and support remote workforces at a faster speed and greater scale than ever before. We remain focused on providing the technology and solutions our customers need to accelerate their digital organizations,” Cisco Chief Executive Chuck Robbins said in a statement announcing the results.
As a major provider of networking equipment, Cisco is a crucial barometer of demand for information technology by major corporations. The results underscore softness in overall IT spending in the age of COVID-19 despite insatiable demand for certain aspects — namely videoconferencing and network infrastructure.