NEW YORK ( TheStreet) -- Cisco (CSCO - Get Report) beat first-quarter earnings estimates Wednesday but shares plunged in premarket trading Thursday after the tech bellweather issued a weak sales outlook.
Cisco shares were down 16.9% to $20.35 prior to the opening of trading Thursday, pulling down stock market futures.
Adjusted fiscal first-quarter profit rose to 42 cents a share from 36 cents a share last year, above analysts' estimates of 40 cents.
First-quarter revenue soared 19% from last year to $10.75 billion, slightly edging analysts' expectations of $10.74 billion.Cisco projects fiscal second-quarter revenue growth of 3% to 5% which works out to revenue of between $10.1 billion and $10.3 billion; analysts expect revenue of $11.08 billion. "Cisco delivered solid financial results, during a challenging economic environment," said Cisco CEO John Chambers in a press release. "While we have seen capital spending moderate in some areas of our business, our execution in the areas we can control and influence speak to the success and relevance of the company's strategy." Cisco, which makes networking equipment, has seen its shares remain relatively stagnant in the last three months, as uncertainty about corporate IT spending has clouded the overall technology sector. The company is largely seen as a barometer for tech sector health because of its large and diverse client base. Cisco recently entered new markets including servers, where it competes with traditional partners HP (HPQ) and IBM (IBM). It has also made a push into consumer products, acquiring the company that makes Flip video cameras last year and announcing its Umi system, which allowers users to video chat from their TVs at home. --Written by Olivia Oran in New York.
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