Tomahawk, WI 12/11/2013 (BasicsMedia) – Cisco Systems, Inc. (NASDAQ:CSCO) disappointed the market with its narrow outlook for fiscal 2014 second quarter. The networking company said that it expected its revenue to drop by as much as 10 percent in the quarter, and probably the quarter after. This announcement was attributed to the falling purchase in the emerging markets and the impact that the alleged U.S. spying on foreign countries was brought to U.S. tech companies.

In the fiscal 2014 first quarter, the company reported earnings per share of 53 cents on revenue of $12.1 billion. These results missed the expected revenue and profits but topped per share earning estimates. During the quarter, the company said that it would continue its shares buyback program of which it’s boosting the program with $15 billion. The company currently has 5.35 billion in outstanding shares.

Investors are attracted to companies which post growing profits and escalate their dividend payout as well as shares repurchase. Cisco Systems, Inc. (NASDAQ:CSCO) has been a darling for many investors because of these. In fact, in the networking industry it has been the leading light in terms of shares buyback and fat dividends. However, its faltering position in the market is causing anxiety.

If what the company says about the situation in China in connection to the doping allegations and other emerging markets is true, then the stock is not attractive for a buy now. But those holding the stock can continue their hold as they wait to see what happens in the next quarter.

The predicted drop in revenue in the current quarter may or may not happen. It could happen if Cisco Systems, Inc. (NASDAQ:CSCO)’s customers in China, fearing further U.S. spying, choose to replace their networking infrastructure with equipment offered by the rival company Huawei. However, if that doesn’t happen and the other Asian emerging markets as well as African perform well, there are chances of the company posting better than estimated results in the current quarter.

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