Cisco Seeing No Delta-Variant Impact on Customer Spending: CEO
With the market “uncertainty” hovering around COVID-19, Cisco is “closely monitoring the delta variant and its impact on customer spending,” said CEO Chuck Robbins on an earnings call Wednesday for fiscal Q4 ended July 31. “We are not seeing any…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
additional impact on our business, aside from the components shortage we've been facing over the past several months.” Cisco expects the “supply challenges and cost impacts” to continue at least through the Jan. 31 end of its fiscal first half “and potentially into the second half,” he said. The company is navigating through the shortages by “leveraging our volume purchasing and extended supply commitments,” said Chief Financial Officer Scott Herren. The supply and demand “imbalances” in semiconductors and memory chips are turning into “higher component costs as we buy from those suppliers,” said Herren. “It takes a while for those costs to flow through our standard costing system and show up in the cost of goods sold.” Cisco imposed price increases Aug. 7 that were “very selective, very targeted, only on the products where we were seeing the higher component costs,” he said. The price hikes aren't motivated by driving “top-line” revenue growth “as much as they're motivated by offsetting some of the cost increases,” said Herren.