Not a bad quarter for Cisco, given that the bottom has fallen out of the emerging markets and service provider business.

After the market closed yesterday, Cisco (CSCO) announced fiscal first quarter revenue and earnings that beat expectations, but the company also lowered its forward guidance as service providers, emerging markets, and regulatory uncertainty continue to weigh on the networking company's business. (Sometimes we get some headlines right.)

The networking giant announced sales of $12.25 billion for the quarter, which came in above consensus estimates of $12.17 billion and guidance for $12.1-12.2 billion. Pro forma Earnings Per Share (EPS) of $0.54 beat $0.53 consensus estimates.

Gross margins held nicely, coming in at 63.3% vs. consensus of 61.7%, which was greeted as good news by investors, in an environment where pricing pressure is intense. Cisco shares were up about 2% on the news this morning, trading at $25.63.

Looking forward, Cisco management expects 4-7% year-over-year revenue growth for the second fiscal quarter (ending in January), with $11.8 billion in revenue. That's below consensus estimates of $12.1 billion. It expects pro forma EPS of $0.50-0.52 vs. estimates of $0.53.

With the ongoing winter in service provider spending, these weren't bad results. Even the cut in revenue guidance was not as bad as some people expected. The service provider business continues to be a drag, with the revenues off 10% on an annual basis, according to Cisco officials. Late last week, AT&T, a big Cisco customer, announced it was cutting capital spending (capex) by 15% in 2015.

“Guidance below consensus was near our expectation with much of the blame placed on U.S. service providers and emerging markets,” wrote Simon Leopold, Managing Director with Raymond James, in a research notes this morning. “These comments really should not be shocking following AT&T's recent 15% 2015 capex reduction and President Obama's comments on Network Neutrality. To provide context, we think service providers are 25-30% of sales, with the U.S. a teens percentage and AT&T under 5%. Emerging markets are perhaps 20% of sales, with BRIC plus Mexico down 12% in the quarter.”

By most measures, Cisco's data-center business appears to be growing nicely. Given the slump in service provider and emerging market spending, new products made up for the slump in other areas. Although Cisco does not break out sales, analysts believe the Nexus 9000 switches and APIC controller are selling well.

Cisco also announced that CFO Frank Calderoni is stepping down, effective January 1, 2015. Kelly A. Kramer, senior vice president, Business Technology and Operations Finance, will succeed Calderoni. But there's still no word on the retirement plans of Chairman and CEO John Chambers, who was rumored to be mulling retirement by year end.

Cisco ended the quarter with $52 billion in cash on the balance sheet, about the same amount it held a year during the prior quarter.