Naweed & Kamran Research
May 21, 2022
There were two unanticipated events since Cisco’s last earnings call which impacted its Q3 (2022) revenue performance.
The first event is the war in Ukraine. This resulted in Cisco ceasing operations in Russia and Belarus and had a corresponding revenue impact.
The second event relates to COVID-related lockdowns in China, which began in late March. These lockdowns resulted in an even more severe shortage of certain critical components. This in turn prevented Cisco from shipping products to customers at the levels it originally anticipated heading into Q3.
Cisco’s Q4 guidance incorporates a wider than usual range, taking into account the revenue impact of the war in Ukraine and the continuing uncertainty related to the China COVID lockdowns.
Cisco believes that its revenue performance in the upcoming quarters is less dependent on demand and more dependent on the supply availability in this increasingly complex environment.
While certain aspects of the current situation are largely out of its control, Cisco has been working on several mitigation actions to help alleviate many of the component issues. Cisco believes that it will begin to see the benefits of these actions …..