during the quarter, orders from Cisco's enterprise customers rose 5%, marking two-percentage point acceleration from the fourth quarter. But commercial orders were up only about 1% during the quarter, down from 5% in the fourth quarter. Plus, as disappointing as the 5% decline in orders it received from telecoms in fourth quarter was, things were worse in the first quarter as telecom orders declined 12%.

Given these trends, Cisco, despite the downbeat outlook, doesn't want to set itself up to fail and miss earnings in the second quarter, especially since there are no guarantees that orders from telecoms vendors will pickup. What we do know is that the company still makes a boatloads of money, as evidenced by $2.7 billion in reported cash flow from operations, which bodes well for future dividend payment increases and stock buybacks.