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Cisco and Palo Alto Networks shares drop after hours despite earnings beats

EditorHari Govind
Published 16/11/2023, 00:58
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NEW YORK - Major stock indices showed mixed results on Wednesday, with the Dow Jones Industrial Average standing out with a moderate increase, while other indices saw slight gains amid investor response to economic indicators and corporate earnings reports. The Dow climbed by 0.47%, while the Nasdaq Composite edged up by 0.07%, and both the S&P 500 and Russell 2000 increased by 0.16%.

The market's tepid reaction came even as October's Producer Price Index (PPI) rose by a lower-than-anticipated 2.9% year-over-year, suggesting easing inflationary pressures and raising hopes for a "soft landing" for the U.S. economy without triggering significant market growth.

In after-hours trading, two tech giants experienced notable declines in their share prices, despite surpassing quarterly financial expectations. Cisco Systems (NASDAQ:CSCO)' shares fell by 9% after the company reported first-quarter earnings of $1.11 per share on revenue of $14.7 billion but provided lower-than-expected revenue guidance for the next quarter, projecting between $12.6 billion and $12.8 billion.

Similarly, Palo Alto Networks (NASDAQ:PANW) saw its shares decrease by 9% after the market close. The cybersecurity firm posted earnings of $1.38 per share and revenues of $1.90 billion for the quarter, exceeding Wall Street estimates on both the top and bottom lines. However, these figures did not satisfy investors' high expectations, despite the company's impressive year-to-date growth of 85%.

The contrasting outcomes for Cisco and Palo Alto Networks highlight a challenging environment where even strong earnings reports can be overshadowed by cautious forward-looking statements or failure to meet lofty investor expectations. This underscores the delicate balance companies must navigate in communicating their performance and outlook to an increasingly scrutinous market.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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