Cisco dives on weak outlook

Technology bellwether Cisco Systems plunged 16.2 per cent to $20.52 in frenzied trading yesterday, a day after a gloomy revenue outlook left investors jittery, and some brokerages downgraded the stock. More than $23.5bn was eroded from the company’s market cap with about 200m shares changing hands in 30 minutes of trading, four times their 50-day moving average volume. Shares of rivals Juniper Networks, F5 Networks, Riverbed Technology and Jabil Circuit also sank. Cisco also dragged down the broader market. At least three brokerages lowered their ratings and six others cut their price targets on the shares of the company, which said weak spending by its public sector customers and soft orders from its cable segment hurt its results. The disappointing forecast comes a quarter after Cisco warned of an uncertain economy.