On Wednesday Cisco Systems Inc. reported that it has gained eight percent in its profit but as the tech major reported that its sales outlook for the year is less than expectations, the shares of the company declined sharply.

The shares of Cisco saw a decline of more than fourteen percent as seen in the later hours of trading.

Cisco reported that its revenue might increase in the tune of three to five percent year-over-year for its current quarter but analysts expected it to be in the tune of thirteen percent. These statistics were provided by a consensus survey done by FactSet Research.

Cisco's CEO John Chambers stated that the environment was not conducive as there were striking trends along with low government spending and a bleak cable business of North America.

Chambers had said over telephone that they faced challenges in their businesses of public sector, European business and service provider. He stated further that they are not at all happy and have hit two bad air pockets.

He further told reporter that the government spending has contracted all across the world and that had affected all the trades

Several analysts as well as investors were taken aback by the sober forecast done by Cisco because it is widely considered to be a strong firm of the industry.

Paul Mansky an analyst from Canaccord stated that Cisco is good on macro economic inflections and now the firm is seen inflecting in a different direction than that of macro economy which is a matter of concern.

According to the analyst of Kaufman Bros, Shaw Wu, there will now be questions whether the firm is loosing its core markets' share. He stated further that this indicates that the networking market is slowing down but that vary from firm to firm.