Over a year, Cisco stock experiences its worst 10% decline.

• On Thursday, Cisco's stock experienced a 9.8% decline, which was the worst day since May 19, 2022 when the stock dropped 13.7%.
• Although the company surpassed Wall Street's revenue and earnings expectations, it issued cautious revenue forecasts for the upcoming fiscal second quarter.
• Customers' deployment of recently purchased Cisco products led to a decline in orders, according to the company.

On Thursday, shares closed down 9.8%, which was the worst day since May 19, 2022 when the stock dropped 13.7%.

The company reported quarterly earnings that exceeded expectations on both the top and bottom lines, but provided weaker-than-anticipated revenue guidance for the upcoming quarter and reduced its full-year revenue forecast.

Customers' deployment of recently purchased Cisco products led to a decline in orders, according to the company.

"Our customers and partners are now facing the bottleneck in the supply chain that we previously identified," stated CEO Chuck Robbins during the earnings call.

Cisco reported adjusted earnings per share of $1.11, exceeding the $1.03 LSEG estimate. However, it fell short of the $4.67 billion revenue projection, with analysts expecting $14.19 billion. Cisco forecasts adjusted earnings per share of 82 cents to 84 cents on $12.6 billion to $12.8 billion in the fiscal second quarter, implying a 6.6% revenue decline.

Despite the earnings beat and upward revision to its full-year earnings, analysts focused on the revenue guidance cut.

Goldman Sachs analysts reported that CSCO's product orders decreased in the quarter due to customer inventory digestion, with CSCO estimating that 1-2 quarters of inventory remain to be digested by customers.

FY24 revenue guidance for Bank of America has been reduced by $3.2bn due to a 6% decline in product orders, which resulted in a 20% decline in product orders.

The company's revenue growth in 3Q23 and 4Q23 was due to a return to the true revenue environment, without any competitive factors, but there were additional weaknesses related to orders reverting to the mean.

CNBC’s Jordan Novet and Michael Bloom contributed to this report.