Cisco Systems, Inc. (NASDAQ:CSCO) released its latest earnings report after closing bell tonight, posting non-GAAP earnings of 61 cents per share or $3.1 billion on $12.4 billion in revenue for the first quarter of its fiscal 2017. Analysts had been expecting earnings of 59 cents per share on $12.33 billion in revenue. The revenue result marked a 1% year over year increase, which was at the top of the company’s previously provided outlook of between a 1% decline and a 1% increase year over year.

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In the same quarter last year, Cisco reported earnings of 59 cents per share or $3 billion on $12.68 billion in sales. Excluding the SP Video CPE Business, the company’s revenue was $12.3 billion in the year-ago quarter. Cisco Systems completed the divesture of the business on Nov. 20, 2015.

Cisco Systems’ earnings decline

Cisco’s GAAP earnings declined to 46 cents per share or $2.3 billion from 48 cents per share or $2.4 billion in the year-ago quarter. Americas revenue declined 1% year over year, while EMEA revenue was flat with last year and APJC revenue grew 6%. Deferred revenue grew 12% to $17 billion, and deferred product revenue increased 19%, driven by software and subscription-based offerings.

The company said Security and NGN Routing revenue led its product sales, with the former growing 11% year over year and the latter climbing 6% from last year. Switching revenue fell 7%, while Collaboration and Data Center revenue declined 3% each and Wireless and Service Provider Video revenue each fell 2%.

Cisco Systems’ GAAP gross margin was 63.8%, while its GAAP product gross margin was 63.4%. The non-GAAP margins were 65.2% and 64.8%, respectively.

“We had a good quarter despite a challenging global business environment and we performed well in our priority areas,” Cisco Systems Chief Executive Officer Chuck Robbins said in a statement. “We are leading our customers in their digital transition by providing them with highly secure, automated, and intelligent solutions in the ways they want to consume them. Our innovation pipeline is robust and we are well positioned for the future.”

Cisco Systems provides weak guidance

For the second quarter, Cisco Systems expects GAAP earnings to be between 42 cents and 47 cents per share and non-GAAP earnings to be between 55 cents and 57 cents per share. The networking equipment maker expects revenue for the second fiscal quarter to decline by 2% to 4%. This outlook has been normalized to exclude the SP Video CPE Business for the quarter.

Analysts are expecting second quarter earnings of 59 cents per share. Shares of Cisco Systems slumped in after-hours trades, falling by as much as 4.21% to $30.24.