Will Cisco survive in hard times?

John Chambers, chief executive of Cisco Systems Inc., stated that the global economic downturn will continue to affect the company.

In its current quarter, Cisco analysts have predicted to see 15% - 20% decline in revenue. According to a poll by Thomson Reuters 11% decline in revenue of the company is expected in the third quarter. Shares of Cisco dropped about 4% in after-hours trading after adding 22 cents and closed at $15.84 in the regular session. Cisco had reported a 27% drop in its net income for the second quarter ended Jan. 24. This rate was above the estimates done by analysts. profit of the company came to $1.5 billion or 26 cents per share, against $2.06 billion, or 33 cents per share a year ago. Excluding certain one-time charges, the company earnings made $1.9 billion, or 32 cents per share, while analysts polled by Thomson Reuters had forecasted it to be 30 cents per share. Sales of Cisco made $9.09 billion (decrease of almost 8% from $9.83 billion last year). Analysts had forecasted the figure to be $9 billion.

Because of its size and the wide range of markets it operates in, Cisco is often considered to be a bellwether for its industry. In order to reduce the negative outcomes of the situation the company has already started taking measures. However, Chambers expressed unwillingness to cutting jobs. He highlighted that if job cutting was to take place it would be a large cut of about 10% of its employees. Cisco has been reported to have employed 67,318 workers globally at the end of the second quarter.