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Cisco Systems Q1 Results Top Street, Outlook Weak; Shares Fall 5%

Silicon Valley giant Cisco Systems Inc., (CSCO) Wednesday reported a profit and revenues for the first quarter that trumped Wall Street analysts estimates. However, shares slipped 5% in extended trading session on weak outlook.

The San Jose, California-based networking-equipment maker reported first-quarter profit of $2.9 billion or $0.68 per share, compared to last year's profit of $3.5 billion or $0.77 per share.

Adjusted earnings for the quarter were $0.84 per share, up from $0.75 per share last year. On average, 26 analysts polled by Thomson Reuters estimated earnings of $0.81 per share for the quarter.

Revenues for the quarter grew 1 percent to $13.2 from $13.1 billion last year. Analysts had a consensus revenue estimate of $13.09 billion for the quarter.

"We performed well in Q1, growing revenue and delivering strong margins and EPS," said Kelly Kramer, CFO of Cisco. "With software subscriptions now at 71% of our software revenue, we are making good progress in transforming our business model."

Looking forward to the second quarter, Cisco expects adjusted earnings of $0.75 to $0.77 per share with revenues to decline 3 to 5 percent. Analysts currently expect earnings of $0.79 per share.

CSCO closed Wednesday's trading at $48.46, up $0.09 or 0.19%, on the Nasdaq. The stock, however, dropped $2.43 or 5.01% in the after-hours trade.

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