Things may be looking up for U.S.-China trade relations, which in turn is good for networking hardware colossus Cisco Systems, Chairman and CEO Chuck Robbins told CNBC on Wednesday.
“We’re beginning to hear some positive sound bytes around this,” Robbins told Jim Cramer in an exclusive “Mad Money” interview. “I’m optimistic that we’ll get to some resolution that is good for both and really allows us to continue this global expansion of the economy that we’ve all been enjoying for the last few years.”
Robbins may have been referring to top White House economic advisor Larry Kudlow’s comments to CNBC’s David Faber on Tuesday, which confirmed reports that U.S. and Chinese officials had restarted trade talks ahead of the G-20 summit at the end of the month. President Donald Trump and Chinese President Xi Jinping are expected to meet at the summit.
“We’re moving ahead on trade discussions,” Kudlow said in the interview.
Cisco’s CEO admitted that his company was affected by the Trump administration’s 10-percent tariffs on imports from China in its fiscal first quarter, reported after Wednesday’s closing bell.
“We implemented some price increases, as we said we would, and, frankly, we didn’t see any difference in the momentum before we did that and the momentum we saw after that in the quarter,” Robbins told Cramer. “Obviously, we would prefer that the tariffs don’t get increased to 25 percent in January.”
Still, Robbins said his “belief all along has been that once we got through the midterms, that the administration would begin to really focus on this,” and so far, that seems to be coming to fruition.
In the meantime, Cisco is delivering “consistent” growth as more and more companies realize just how complicated it is to seamlessly and securely shift their operations to the cloud, a process that is now fueling Cisco’s bottom line, the CEO said.
Shares of Cisco fell amid marketwide declines on Wednesday, but rose nearly 5 percent in after-hours trading following the earnings beat.
source : CNBC