Cisco stock price plunged more than 6% after the company topped analyst’s revenue and earnings expectations. The investor’s sentiments are impacted by lower than expected guidance for the current quarter as the company expects double-digit revenue decline, with the massive drop in earnings.

Its fourth-quarter revenue came in at $12.15bn, down from analysts’ consensus estimate by $60 million and plunged 9.5% from the previous year quarter.

The revenue from core infrastructure business slipped by a double-digit rate from the year-ago period. On the positive side, revenue from the security business grew 10% year over year. Revenue from infrastructure platforms dropped 16% to $6.63 billion while application revenue was off 9% to $1.36 billion.

The full-year revenue declined by 5% to $49 billion, with 55% of revenue came from software and services business. The company has been aggressively moving towards software business as software revenue accounted for 78% of total revenue.

“We executed well in Q4, delivering strong margins despite the very challenging environment,” says CFO Kelly Kramer. “Software subscriptions now make up 78% of our software revenue and remaining performance obligations continued to grow strongly in the quarter, reflecting the strength of our portfolio of software and services.”

CSCO Cisco Systems, Inc. daily Stock Chart

After plunging to a 52-weeks low of $32 in March, Cisco stock price has easily recovered all the losses. The share price rally now looks unsustainable as investors reacted strongly to lower guidance for the first quarter. Cisco stock is trading in negative territory so far this year.

JPMorgan has downgraded Cisco stock to Neutral from Overweight. The firm is pointing multiple continuing headwinds and expects the company to take a longer time to return to revenue growth.

The company expects first-quarter revenue in the range of $11.71 billion-$11.98 billion compared to the consensus estimate for $12.29 billion. The revenue guidance indicates a double-digit decline from the year-ago period.