According to the Financial Times, Cisco said on Wednesday local time that tight chip supply will affect its profit margins this quarter.

Although Cisco's financial performance last quarter was stronger than expected, the warning caused Cisco's stock price to fall nearly 6% in after-hours trading.

Other companies have also warned of the impact of supply shortages, especially the automotive industry, but the news from Cisco will more directly reflect the pressure on the industry.

Cisco warned that due to higher costs, the gross profit margin for this quarter may be about 1.5 percentage points lower than the previous quarter. Revenue for the quarter increased by 6%-8%. Although higher than Wall Street’s expectations, it was still lower than expected under normal supply conditions.

Cisco CFO Scott Herren said that Cisco has to bear higher cost prices to ensure the delivery of chips and other key components in the next few months. It also witnessed "accelerated fees" (that is, to ensure that it has enough key components to maintain production. The cost of air transportation caused by the operation of the line has soared.

Herren said that supply chain problems will continue at least until the end of this year.

Cisco CEO Chuck Robbins said that Cisco chose to absorb rising costs to a large extent, rather than choosing to deal with price increases. However, if the trend of rising costs begins to appear, Cisco will consider price increases when necessary.

Cisco executives claim that Cisco has begun to get out of the epidemic and is beginning to see the benefits of shifting its business model to more profitable software and services.

The extreme pressure caused by the chip shortage has caused various companies to stock up on key components and products. Some analysts therefore question whether Cisco's own sales have been artificially exaggerated. Robbins said that the company did not find any signs that customers are hoarding inventory, but he added: "We agree that there are early warning signs."