Cisco Trips Over Two Troubling Trends

[Moritz Dispatch]

Scott Moritz
11/11/10 - 08:44 AM EST

Once again, networking gearmaker Cisco was blindsided by an unforeseen
drop in demand as cash-strapped customers slashed spending.

But the impact shouldn't be too surprising given the broader trends
that have been developing for the past several months.

Who hasn't noticed that European governments along with U.S. states
and cities have been crushed by budget shortfalls? And who hasn't been
listening to cable companies cry about losing customers to satellite
and Internet video?

After noting a $500 million shortfall in orders in the October
quarter, Cisco cut its full year sales forecast $1 billion below
estimates Wednesday.

CEO John Chambers called the rash of order cancellations "air
pockets." Investors called it a time to grab the parachutes. Cisco
shares are down 17% in premarket trading Thursday in the wake of the
company's grim outlook.


Great quarter guys: http://www.thestreet.com/story/10919287/1/cisco-trips-over-two-troubling-trends.html