Cisco Systems

(CSCO) - Get Report

beat first-quarter earnings estimates, but the company's shares slumped in after-hours trading after the company said second-quarter revenue would fall 5% to 10%.

Shares of Cisco were off 5.1% in recent after-hours trading to $16.50.

The San Jose, Calif., networking giant said it had fiscal first-quarter profit of $2.2 billion, or 37 cents a share, compared with $2.2 billion, or 35 cents, in the year-ago quarter. Cisco blamed the tough spending climate for its flat profit.

Excluding one-time items, Cisco earned $2.5 billion, or 42 cents a share, which topped analysts' estimate by 3 cents.

Cisco said revenue increased 8.1% from a year ago to $10.3 billion, in line with Wall Street's estimate. During the company's fiscal fourth-quarter earnings call, the company pegged revenue to rise 8% during the quarter.

"Cisco delivered solid revenue and earnings growth in what is clearly a very challenging economy," said Cisco CEO John Chambers in a statement. Cisco said in a subsequent conference call that the company's goal beginning in the second quarter is to realign another $500 million of resourses, while cutting expenses for fiscal 2009 by more than $1 billion from the original budget.

Chambers nonetheless reiterated the company's commitment to a long-term growth rate between 12% and 17%.

Cisco, which competes with telecom manufacturer

Alcatel-Lucent

(ALU)

and

Nortel

(NT)

in the networking space, had $27 billion in cash and investments at the end of the first quarter, according to Chambers.