Cisco (CSCO) Drops On Revenue Warning

Shares of Cisco Systems (Nasdaq: CSCO) are down over 5% in after-hours action after reporting solid Q1 results but warning of slowing sales in Q2.

Cisco reported Q1 EPS of $0.42, 3 cents better than the analyst estimate of $0.39. Revenue for the quarter was $10.3 billion, versus the consensus of $10.30 billion.

For Q2, Cisco said it sees revenues down 5%-10%, which is significantly worse than expected. The company sees Q2 gross margins of about 64%. Cisco said the slowdown has "truly gone global." CEO John Chambers said he has limited confidence in forecasts. Chambers said the overall credit quality in their portfolio is strong. Cisco doesn't now if Q1 was a "kitchen sink" quarter. Chamber said they are dealing in uncharted waters.

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