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Wall Street hit the pause button. Cisco put a brake on the Dow Jones after disappointing revenue forecasts
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Investors took a break after Wednesday’s price gains. Then the broad stock market indicator S & P500 closed at 6 points from its record level in February of 3,386.15. On Thursday, the S & P500 closed 0.2 percent lower.
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Investors also watched news about the US job market. The Department of Labor reported Thursday that the number of US aid applications fell to below 1 million in July.
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Cisco
Cisco went down 11 percent. The largest supplier of network equipment in the world came up with good figures, but disappointed with its outlook. In the fourth quarter, which ran to the end of July, of its broken fiscal year, Cisco posted sales of $ 12.2 billion. While that was down 9 percent, sales were better than the 12.1 billion analysts predicted.
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The company says it saw a drop in sales in several segments and regions. Revenues from products (software and hardware) fell by 13 percent, but the services division saw revenues stabilize. Earnings at 62 cents per share were slightly lower than the market forecast of 65 cents.
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For the current quarter, the company expects a decline in sales of 9 to 11 percent. That equates to sales of between $ 11.7 billion and $ 12 billion, lower than the $ 12.3 billion that market researchers foresaw. The company also predicts earnings per share of between 69 and 71 cents, while analysts forecast 75 cents per share.
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Still, the CEO is satisfied. ‘We demonstrated operational resilience in our 2020 financial year thanks to our strong relationship with the customer. For the future, we are rebalancing our investments in research and development. In this way we can serve our customers better in the future.
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Lift
The Lyft taxi app went 5 percent lower after the quarterly figures showed that the corona virus punctured a hole in sales. Sales in the second quarter plunged 61 percent from the same period last year to reach $ 339.3 million. The number of active users fell by 60 percent to 8.7 million. The net loss fell from $ 644.2 million last year to $ 437.1 million.
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CEO Logan Green remains optimistic. “While the number of rides has dropped significantly, we are encouraged by the recovery trends that we are starting to see.” The CEO says the number of journeys increased by 78 percent in July compared to the month of April.
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Lyft is not the only one in the taxi industry to experience declining sales, as global lockdowns caused the taxi market to collapse in the second quarter. Last week, Uber also reported
disappointing figures for its taxi branch. The number of taxi rides was 56 percent lower and the number of monthly active customers fell by 44 percent.
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