The shares of CiscoThe company reported a 10% drop in sales on Thursday reportedExpected unexpected sales decrease in current quarter, mixed results for earnings

Cisco announced Wednesday that it expected fourth quarter revenue to fall by between 1% and 5.5% from year-over-year. Analysts had expected revenue growth of around 6%. The increasingly complicated environment has made the range of guidance for Cisco CEO Chuck Robbins wider than normal.

Company blamed disappointing prospects on Covid-19 lockdowns, both in China that have made it harder to supply existing constraints and increased inflation. Scott Herren, Cisco’s chief finance officer, warned that components shortages will continue in the coming quarters.

CNBC spoke to Robbins Thursday, saying that the supply of transportation capacity will not return to normal soon. However, Shanghai officials had indicated they intend to open on June 1st. Robbins believes there will be heavy congestion in Shanghai ports once they reopen as businesses race for transportation capacity.

Robbins stated that “in the short term, they believe that as soon as they start to ship, we are just one company with one products we’re trying get out of there,” in an interview to CNBC. “Squawk on the Street.”We do not doubt that there will be an influx of product. We observed their decline in industrial production as well as their export numbers.

Robbins stated that “when they open up ports and airways, it’s going to create some competition for them.” So we think there will likely be some temporary pressure, and then when they release it onto the oceans we might see another issue in LA. Or in other ports. We’ve already seen ships backed up trying get into LA. This was how we thought of the guide. We are just worried that, if they do open, it won’t result in as many shipments as we wish.

Robbins indicated that he expects these issues to start to diminish by the second quarter of fiscal year.

Cisco posted third-quarter revenues of $12.84 trillion, an amount that was flat over the past year and less than Wall Street’s $13.34 billion estimate. Analysts had expected 86 cents. Adjusted earnings per sen were 87 cents.

Revenue for the third quarter was affected by the conflict between Russia and Ukraine. This caused a $200 million drop in revenue and added $5M to Cisco’s costs of sales.

— CNBC’s Jordan NovetThis article was contributed by.

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