Cisco Q4 beats expectations, offers weak Q1 revenue forecast

Yahoo Finance's On The Move panel break down Cisco's latest earnings report.

Video Transcript

ADAM SHAPIRO: And we also we're talking about, as we went to commercial break, the fact that Cisco is trading down about 10% today. Revenue came in. Year over year, it was down 9%, $12.15 billion. Julie, what do you make of this?

JULIE HYMAN: Well, Cisco seems to be facing sort of secular headwinds, right. This is a company whose business is stuff, in other words hardware, in a world that's moving away from hardware. So many of its one-time clients perhaps migrating more of their services to the cloud. They've less need for things like routers and switches.

If you look at their infrastructure platforms business, which includes switchers and routers, that was down 16%. If you look at the revenue applications, which includes Webex, which you would think there would be some need for, that business saw revenue fall by 9%. And the company overall is saying that its revenue is going to decline consecutively for the fourth quarter in a row.

So all of this raising some concerns about this one-time giant and the sort of place that it's going to have in the new cloud-based world.

- Well, as Julie was mentioning, it is a surprise that their Webex technology actually saw a decline during the last quarter, when you consider that it got a lot of public play. I mean, that's the technology that we've been using in the Federal Reserve press conferences. That was the technology that interestingly was used in the big tech hearing in Capitol Hill.

But I think also so what's more interesting from a financial standpoint is that Cisco, despite all this, is still offering guidance for the next fiscal quarter. That's something that we've seen a lot of other companies pull back from. When we [? even ?] look at that [? live ?] report, which Julie just talked about, they did provide some guidance. But it was very, very loosely based off of when they expect profitability, which they still forecast at the end of next year.

But here we have a Cisco actually forecasting specifically guidance of $0.69 to $0.71. I mean, that type of granularity specificity is something we haven't really seen since this crisis began, going back about two fiscal quarters. So it's interesting that Cisco is going to do this. It'll be interesting to see if other tangential companies in this space continue to do the same through this season.