Cisco (CSCO) - Get Reportstock was sliding 4.3% to $31.57 in after-hours trading on Wednesday after the San Jose, CA-based networking giant issued a weak outlook for the second quarter of fiscal 2017.
(Follow TheStreet's live blog of Cisco's quarterly report and earnings call)
Cisco expects adjusted earnings between 55 cents and 57 cents a share, and forecasts that revenue will slide 2% to 4% over fiscal 2016 second quarter revenue of $11.93 billion.
Analysts surveyed by FactSet are modeling second-quarter adjusted earnings of 57 cents per share on revenue of $12.0 billion.
Cisco's fiscal first-quarter results topped Wall Street's projections, however. Adjusted earnings for the quarter were 61 cents per share, while total revenue rose 1% year-over-year to $12.4 billion. Product revenue also declined by 1% over last year in the period while service revenue climbed 7%.
Analysts surveyed by Factset were looking for first-quarter earnings of 59 cents per share on revenue of $12.33 billion.
In the same quarter last year, Cisco reported earnings of 59 cents per share on sales of $12.3 billion, adjusted for the company's divesture of its SP Video CPE business in November 2015.
"We had a good quarter despite a challenging global business environment and we performed well in our priority areas," CEO Chuck Robbins said in a company statement.
Earlier this year, Robbins announced plans to restructure the company, which he hoped would allow Cisco "to optimize our cost base in lower growth areas of our portfolio and further invest in key priority areas such as security, Internet of Things, collaboration, next-generation data center, and cloud."
CFO Kelly Kramer said today that the company "will continue to invest in key growth areas and continue to focus on delivering shareholder value."
Part of the company's previously-announced restructuring involved Cisco cutting up to 7% of its workforce, or about 5,500 jobs. The company's operating expenses in the first quarter gained 5% over last year to $5.0 billion, driven in part by the restructuring and lay-off charges.
About 24.72 million shares of Cisco have traded hands on Wednesday, well above the 30-day average of about 19.89 million.