Cisco Systems said Wednesday that supply chain problems will persist through 2021 as it forecast a below-estimates profit for the current quarter, sending its network shares down 5% on Wednesday.
The tech industry is currently facing a chip shortage which has severely affected production in many semiconductor industries.
Cisco’s fourth-quarter profit was 81 to 83 cents per share, compared with an estimated 85 cents per share, and revenue growth is pegged at 6 to 8%.
In an interview, Cisco Chief Financial Officer Scott Herren said the current chip shortage is temporary.
Revenue in the third quarter that ended May 1 rose 7% year-on-year to $12.80 billion, beating analysts’ forecasts of $12.56 billion.
The company’s service revenues increased by 8% and product revenues by 6% as demand for video conferencing, virtual private networks and cybersecurity products boosted sales.
The company is also on track to break the $14 billion mark in software sales over the next 12 months.
Net income rose to $2.86 billion, or 68 cents per share, from $2.77 billion, or 65 cents per share.
For more information, read the original story in Reuters.