Chambers apologizes for Cisco's light Q2

Tells stockholders he's sorry for surprises, hopes outlook is conservative

Cisco CEO John Chambers reportedly apologized to shareholders this week for Cisco's bleak outlook for its current fiscal second quarter. Cisco is guiding to growth of only 3% to 5% for Q2, down drastically from Wall Street's expectations of 13%.

"We won't surprise you very often, and I apologize that we did," Chambers said to shareholders at the company's annual shareholder meeting in San Jose, according to this Wall Street Journal post.

Cisco's stock took a beating after the Q2 outlook. Chambers thought the market overreacted and said he hopes that the 3% to 5% forecast turns out to be conservative, according to the WSJ post.

Analysts brought up various scenarios for Cisco's lackluster Q2, especially when peers and competitors are meeting or beating expectations. One of them was Cisco possibly losing share in its core routing and switching markets while being distracted by its 30 or so market adjacencies.

But both Dell'Oro Group and Infonetics noted that Cisco gained share in calendar Q3.  Cisco's overall router revenue share rose sequentially to 59% in Q3 from 56.5% in Q2, and up from 58% a year ago, states Ticonderoga Securities, quoting Dell'Oro figures.

Meanwhile, it is Cisco's competitors that lost sequential share in Q3: Huawei, Juniper and Tellabs, according to Ticonderoga, citing Dell'Oro data.

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