Cisco says customers delay tech purchases Cisco has cast renewed gloom over the technology sector as it warned that the European financial crisis and increasing global uncertainty had caused customers to delay purchases. The cautious comments, along with a subdued financial forecast for the current quarter, sent Cisco's shares down 8.6 per cent in after-market trading on Wednesday even though earnings at the US maker of internet and communications equipment in the three months to the end of April topped expectations on a surge in sales in Asia. Big companies around the world are holding back from making new purchases, despite being in "the best shape I've ever seen them," said John Chambers, chief executive. Clearly, they're keeping their powder dry. Cisco attributed the uncertainty to the crisis in Europe, where the company saw a deteriorating market in the latest quarter. For the current quarter, Cisco indicated that it expected revenues of up to $11.8bn and pro forma earnings of 44 to 46 cents a share, below most analysts" estimates. To make itself less vulnerable to sudden economic chills, Cisco is intensifying its effort to shift more of its business into contracts where it receives regularly recurring payments from customers, rather than relying on one-off payments, Mr Chambers said. He indicated, however, that the transition would be a slow one, since the shift would lead to a slowdown in reported revenues in the short term due to the way longer-term contracts are accounted for. With the mood in Europe worsening, new orders from that region were unchanged during the latest quarter compared with a year before, Cisco said. By comparison, revenues from Asia surged 24 per cent and profit margins there jumped as Cisco completed booked revenues on the completion of a number of long-term projects. "We don't see this as a given at all," Mr Chambers said of the risk of a broader economic slump. I'm just saying what the customers are saying to us. For the latest quarter, Cisco reported revenues of $11.2bn, an increase of 3.3 per cent from the year before. Net income fell 36 per cent to $1.2bn as the company booked $202m of restructuring charges and saw overhead costs edge up. However, on the pro forma basis on which Wall Street assesses the company, earnings per share were down only 7 per cent at 48 cents, ahead of the 47 cents that had been forecast.