The logo of U.S. networks giant Cisco Systems is seen in front of their headquarters in Issy-les-Moulineaux, near Paris, France August 6, 2022. REUTES/Sarah Meyssonnier/gave a positive forecast for first-quarter sales as a COVID-19 recovery in China eases supply chain shortages and helps it meet demand for networking hardware, sending the company's shares 5% higher in extended trading.
"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%.
Still, rising costs are a cause of concern for the maker of routers, switches and communication tools as it spends more on freight and logistics to ensure a steady supply of components.