NEW YORK (CNN/Money) - Cisco Systems reported sharply higher profits and revenue for the latest quarter Wednesday, but at the same time tempered its outlook for the coming months.

Executives of the largest supplier of the gear that links corporate networks and powers the Internet provided a downbeat outlook for the coming months, saying they expect revenue to be equal to or less than the latest period.

Larry Carter, Cisco's chief financial officer, said on a conference call that the company expects second-quarter revenue to be "sequentially flat to down 3 to 4 percent" from the $4.8 billion it just reported for the first quarter.

He said Cisco expects to have a gross profit margin ranging between 66 percent and 68 percent in the second quarter, adding that operating expenses will decline "slightly" from the first quarter.

Most analysts had expected Cisco's revenue to rise slightly in the second quarter, according to a survey conducted by earnings tracker First Call.

"Ordinarily, you would expect Cisco to give bullish guidance for the January quarter," said Sanford Bernstein analyst Paul Sagawa.

Historically, Cisco's fiscal second-quarters have been seasonally stronger than its other quarters. "So it's relatively significant that they said flat-to-down," Sagawa said.

Cisco (CSCO: Research, Estimates) shares had risen in light after-hours trading following the Street-beating earnings announcement, which was released after the closing bell. But they gave back those gains following the executives' comments, trading 1.8 percent below their closing level on Nasdaq.

Excluding one-time items, Cisco reported a fiscal first-quarter profit of 14 cents per share. That compares with 4 cents per share in the year-ago quarter and was a penny better than most analysts' expectations.

At $4.8 billion, Cisco's fiscal first-quarter revenue rose 9 percent from $4.4 billion a year ago but was flat with the prior quarter.

As have most information technology companies, Cisco's business has been hurt by a protracted downturn in demand from telecommunications service providers and large corporations amid a slowing and uncertain economy.

John Chambers, Cisco's CEO, said spending by telecom service outfits is likely to continue to decline. He said business was still slow in that market, adding that Cisco's revenue in September was lighter than the company had expected.

"This is indicative of how quickly CEO caution can put the foot on the brake," Chambers said, referring to slow September sales.

He added, however, that the September slowdown did not threaten the overall quarter, and sales returned to more normal patterns in October.

Cisco said its cash flows from operations were $1.1 billion for the fiscal first quarter, down from $1.6 billion in the fourth quarter of fiscal 2002. The company said it ended the most recent period with $21.2 billion in cash.

Carter said he expects that Cisco will continue to generate $300 million to $400 million per month in cash.