NEW YORK ( TheStreet) -- Cisco ( CSCO) shares plunged in early Thursday trading, losing 7.5% after it reported earnings that beat consensus, but concerns about the global recovery remain. However, it's not as bad as investors are making it.

First-quarter guidance was a little weaker than what Wall Street was expecting, but concerns over job cuts and the global recovery are pulling shares down sharply. On Cisco's earnings call, CEO John Chambers said the economic recovery is showing mixed signs. "The environment is improving slightly, but nowhere near the pace that we want," Chambers said.

The company also announced it would be cutting 4,000 jobs amid a restructuring program.

For the fiscal fourth-quarter, Cisco reported earnings of 52 cents per share on $12.4 billion in sales, up 6% year-over-year. Analysts surveyed by Thomson Reuters expected Cisco to earn 51 cents a share.

Despite the sharp decline in shares, it's not all bad. UBS analyst Amitabh Passi, who rates shares "buy" with a $28.50 price target, noted that the company is still executing well amid the weak economic recovery. "CEO Chambers noted economic recovery was slower and more inconsistent than expected," Passi wrote in his note. "With this backdrop, we believe Cisco is executing well, meeting/exceeding margin, EPS, and capital return targets, with mgmt noting $1m deals rose 50% y/y. While macro softness could stall some share momentum, we see Cisco well-positioned among leading IT providers and retain a Buy rating."

There were some bright spots during the quarter, with video product sales rising 23% year-over-year, wireless access points rising 32% to $637 million and data center equipment rising 43% year-over-year. Yes, there were a couple bleak spots, including Next Generation Routing sales showing flat growth at $2.09 billion, and collaboration tools falling 2%, but the cautious tone is hurting the stock, notes BMO Capital Markets analyst Tim Long, who rates shares "outperform," with a $29 price target.

"The quarter itself was fine and even guidance was okay, albeit a little on the light side, but management's more cautious tone and the announced layoffs suggest it could take some time before growth picks up again," Long wrote in his note. "In the end, our estimates are not changing all that much, but the multiple will take a hit given how strong the stock has been YTD."

CSCO Chart CSCO data by YCharts

Wall Street is showing extreme amounts of concerns about the job cuts, and though CFO Frank Calderoni in an interview with TheStreet wouldn't clarify further on the cuts, Oppenheimer analyst Ittai Kidron , who rates shares "outperform" with a $27 price target believes it should be taken as a positive. "Investors could look at the planned 4,000 headcount reduction as a sign of greater issues, yet we would take the view that Cisco is merely accelerating planned reorg. activities to better align resources for future growth," Kidron wrote in his note. "We view this as a bump in the road and remain bullish on Cisco."

Prior to the report, shares were up sharply year-to-date, and there was a lot of enthusiasm going into the print, especially in light of Brocade's ( BRCD) earning results.

Lazard analyst Ryan Hutchinson who has a "neutral" rating on shares believes that demand is improving, and the second half should be better. "We believe Cisco's results may damper sentiment across the group; however, we believe that demand trends are modestly improving and remain optimistic with respect to a 2H recovery in IT spend."

-- Written by Chris Ciaccia in New York

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