Following Wednesday afternoon's quarterly earnings release, shares of Cisco Systems (CSCO) were down about 5% after hours due to the soft July quarter (fiscal fourth quarter) guidance the company provided with its April quarter beat. But shares finished after-hours trading down 7.7%, wiping out a large chunk of their 2017 gains, and remained at about that level in pre-market trading on Thursday.

The commentary that CEO Chuck Robbins and CFO Kelly Kramer provided about product order trends may have had something to do with the additional losses. But it also didn't help that markets weren't appeased by the various explanations that Cisco provided for a weak outlook that comes amid stiff competitive and/or secular pressures for a number of hardware businesses.

Cisco reported April quarter revenue of $11.94 billion (down 1% annually) and adjusted EPS of $0.60 (up 5%), beating consensus analyst estimates of $11.9 billion and $0.58. But the networking giant guided for July quarter revenue to be down 4% to 6% annually, and for EPS to be in a range of a $0.60 to $0.62. That compares with a consensus for a 1% sales decline and EPS of $0.62.

The company also disclosed that it just added 1,100 job cuts to its August 2016 restructuring plan, which initially featured 5,500 job cuts. $150 million in pre-tax charges are expected for the new layoffs.

A continued sales mix shift toward software subscriptions and other recurring revenue streams is weighing on Cisco's growth rates, by moving revenue from the top line to a deferred revenue balance that rose 13% last quarter to $17.3 billion. But with Cisco indicating that this mix shift had about a 200 basis-point impact on sales growth last quarter, its guidance appears to still imply a 2% to 4% sales decline excluding the mix shift.

Jim Cramer and the AAP team hold positions in Cisco and HP Enterprise for their Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells CSCO or HPE? Learn more now.

If you liked this article you might like

7 Essential Rules for Investing in Tech Stocks

Hewlett Packard Enterprise Becomes the Latest Tech Titan to Slash Jobs

Tax Reform Is Coming and That Means Trump Stock Rally Is Ready to Kill It Again

'Trump Stock' Rally Is Back on Track

These Stocks Pay You to Own Them