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Cisco Systems Inc. (NASDAQ: CSCO) reported its fiscal first-quarter financial results after the markets closed on Wednesday. Overall this networking giant had a good quarter, posting beats on both the top and bottom lines. However, these results could not stand up to what Cisco expects in the coming quarter, and investors sent shares lower as a result. Also keep in mind that shares have been trading just below the 52-week high, so it is not out of the question that investors would demand an especially strong report all around.

The company posted $0.61 in earnings per share (EPS) and $12.35 billion in revenue. The consensus estimates from Thomson Reuters called for $0.59 in EPS and $12.33 billion in revenue. In the same period of last year, Cisco reported EPS of had $0.59 and $12.68 billion in revenue.

Deferred revenues were up 12% at $17.0 billion, with deferred product revenue up 19%, driven largely by subscription-based and software offerings. Deferred service revenue was up 8%. The portion of product deferred revenue related to recurring and subscription businesses grew 48%.

In terms of the outlook for the fiscal second quarter, the company expects to see revenues decline in the range of 2% to 4% year over year and EPS to be in the range of $0.55 to $0.57. The consensus estimates are calling for $12.15 billion in revenues and $0.59 in EPS.

Chuck Robbins, CEO of Cisco, commented on earnings:

We had a good quarter despite a challenging global business environment and we performed well in our priority areas. 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.

Kelly Kramer, CFO of Cisco, added:

We executed well in Q1 delivering profitable growth, and saw strong adoption of our subscription-based and software offerings as we transition our business to a more recurring revenue model. We will invest in key growth areas and continue to focus on delivering shareholder value.

Cash flow from operations was $2.7 billion, a decrease of 1% compared with $2.8 billion in the same period last year. On the books, Cisco’s cash, cash equivalents and investments totaled $71.0 billion at the end of the quarter, compared with $65.8 billion at the end of fiscal 2016.

Shares of Cisco closed Wednesday at $31.57, with a consensus analyst price target of $33.50 and a 52-week trading range of $22.46 to $31.95. Following the release of the report, the stock was initially down 4.6% at $30.13 in the after-hours trading session.