According to Cisco, quarterly sales for January will increase from 4.5% to 6.5%. Analysts expect revenue to be up 4% compared to last year. Revenue is projected to grow 6.5% in fiscal 2023, up as much as 6% from previous estimates.
Cisco said the restructuring in the current quarter will include certain steps, namely job cuts to balance the organization, as well as office closures to better align employees working on a mixed system from home and office. Cisco will incur about $600 million in costs for severance payments to those laid off and other expenses.
Chief Financial Officer (CFO) Scott Herren said the restructuring plan will affect about 5% of the company's employees, who will be given the opportunity to move to other positions at Cisco. Herren also added that it's not about reducing their workforce at all — in fact, they will have about the same number of employees left at the end of this fiscal year as they had in early 2022.
Cisco executives said that data network modernization is so important that corporations and government agencies continue to invest regardless of external circumstances. That optimism in the face of a broader economic downturn is bolstered by continued high orders and Cisco's ability to meet customer needs through greater component availability.
After three months, by Oct. 29, earnings were up 6%, making a total of $13.6 billion. Earnings per share were 86 cents. Analysts had forecast sales of $13.3 billion and earnings of 84 cents per share.
Herren's statement pointed out that revenue from new product offerings increased to $23 billion year-over-year, and the greater availability of chips helped the company fulfill more orders. These figures, along with the improved supply situation, give them more transparency and predictability, and support their elevated forecasts for the full year.
Earnings will be between 84 and 86 cents per share for the current quarter. For the full fiscal year, Cisco is forecasting figures of between $3.51 and $3.58 a share. Both forecasts are in line with analyst estimates.