Cisco Systems (NASDAQ:CSCO) reported its fiscal first quarter earnings yesterday, and it wasn't pretty.

The company saw its revenue increase just 1.8% to $12.1 billion, up from $11.9 billion year-over-year. Cisco had expected an increase of 3% to 5% for the quarter. Low orders from emerging markets and slow sales to service providers were part of the company's problems this quarter. The former fell by 21%, while video-related equipment sales to service providers declined by 14%.

Cisco Chairman and CEO John Chambers said the company's slow revenue growth in the quarter was below its expectations. In the analyst call, Chambers said, "Over the last few quarters, I've shared with you what I've been seeing; a macro environment that is inconsistent and very hard to read, with business leaders' confidence slowing purchase decisions."

By company segments, Cisco's enterprise division grew by 2%, commercial rose by 1%, public sector declined by 1% and service providers declined by 13%. Chambers also noted that the government shut down hurt the company's business by about $50 million.

The slow quarter caused Cisco's profit to decline by 4.6% to $2 billion, with earnings per share of $0.37, down from $0.39 a year ago.

A time of transition
Back in August, Cisco announced it would lay off about 5% of its workforce, a total of 4,000 employees. It was the second job cut the company carried out in two years, and brings the total number of employees cut to 12,300. Cisco is in the midst on focusing more of its attention on the company’s enterprise business, as is evident from the amount of acquisitions the company has made lately.

Over the past year, Cisco has gobbled up 12 companies at a cost of $4 billion. Over the past five years the company has spent a total of about $18 billion on acquisitions. Many of the acquisitions have revolved around cloud and mobile technologies, and its most recent purchase of Whiptail back in September adds cloud-based flash storage to the list.

While the company approved an additional $15 billion worth of stock repurchases, Cisco's second-quarter outlook won't be much of a comfort to investors. In an analyst call, Chambers said the company estimates revenue decreases of 8% to 10% in the fiscal second quarter. While the company's stock is up about 18% from the beginning of the year, investors obviously shouldn't be happy with the company's latest results -- and should view the next quarter cautiously. But while Cisco is in the middle of a difficult one or two quarters, the company's overall strength shouldn't be judged on just three months of numbers.