CEO of Cisco, which saw a huge drop in China sales, says state-owned enterprises shunned them

Cisco’s Chairman and CEO Chuck Robbins speaks to participants during the Viva Technologie show at Parc des Expositions Porte de Versailles in Paris on May 24, 2018.Chesnot | Getty ImagesChinese government-controlled enterprises are opting to work with local vendors rather than American-owned companies as the U.S.-China trade war continues, Cisco Systems CEO Chuck Robbins told CNBC on Thursday. « We certainly saw an impact on our business in China this quarter. A lot of state-owned enterprises, I think where they have options, they’re choosing local manufacturers, » Robbins said on « Squawk on the Street. » « We don’t know if that’s a short-term thing or a long-term thing. »Cisco shares tumbled Thursday after the California-based computer networking equipment company issued weaker-than-expected forward guidance, citing macro uncertainty. Revenue in China was down 25% on an annualized basis in its fiscal fourth quarter, Cisco Chief Financial Officer Kelly Kramer said on Wednesday’s post-earnings conference call. « While it’s a small part of our business, when it falls off that precipitously, it creates a challenge, » Robbins told CNBC on Thursday. « We saw strength in other parts of the business. But during July, we felt a slight change in sort of the overall macro [economic environment] versus what we’d experienced in the prior months. »If the U.S. and China were able to strike a deal to resolve their trade and technology disputes, Robbins said that he would expect « more robust access » in China.— CNBC’s Jordan Novet contributed to this report.

Source: CNBC

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