Networking Companies Feel Impact of Government Cuts

Government spending cuts will include network equipment, warns Cisco (NASDAQ: CSCO) as it prepares for the release of its quarterly results. Techeye claims Juniper Networks and Brocade have also warned that profits will not be as good as they hoped.

The reason behind the bleak outlook is that large networking companies are dependent on government contracts, and with a poor economy the government is making cut backs.

Brocade (Nasdaq: BRCD) is reporting weak demand in IT, from government customers,reinforcing the speculations from equipment vendors and adding to the pall that’s building over the industry. In fact, the company’s share price has fallen 7.6 percent.

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