Cisco (CSCO) guides on its FQ1 CC for FQ2 revenue to decline 8%-10% Y/Y, and EPS of $0.45-$0.47. That's well below a consensus for a 4.1% revenue increase and EPS of $0.52. The networking giant is also guiding for FY14 (ends July '14) EPS of $1.95-$2.05, below a $2.10 consensus.
Orders fell 4% Y/Y in FQ1 after growing 4% in FQ4. The two biggest culprits: Service provider orders fell 13%, and emerging markets orders fell 12% (India and China -18% each). The company isn't currently expecting order improvement in FQ2.
Service provider weakness is blamed on soft carrier spending, declining set-top sales (attributed to product shifts and an effort to move away from low-margin deals), core router product transitions, and low-end edge router share loss (likely to Juniper).
Also: Cisco estimates the government shutdown impacted FQ1 U.S. federal sales by $50M, and the political environment in China is said to remain "challenging."