NEW YORK (CNN/Money) - The market giveth, and the market taketh away.

That's a lesson Cisco Systems learned after the bell on Wednesday, when its shares got a splash of cold water after-hours as the company issued a weaker than expected forecast for the current quarter.

That reality check reversed earlier gains, when the shares rose over $18 on the back of strong results for its fiscal first quarter. Cisco is the world's largest maker of gear such as routers and switches that connect computers and servers to the Internet.

"It would have been a great quarter if we didn't have the guidance for Q2," said Mona Eraiba, an analyst with Rosetta Group Research. "Guidance for the next quarter was somewhat less than people hoped for. They were hoping the second quarter would be in line with the balance of the year."

Cisco said it expects revenues to grow between eight and nine percent, over revenues of $6.1 billion in the same quarter last year. The high end of that forecast is below the $6.73 billion analysts currently expect and translates to flat growth quarter to quarter, a disappointment to analysts and investors, who point out that the second quarter is traditionally a seasonally strong quarter for Cisco.

While the company posted strong performance in the U.S. during the first quarter, Cisco president and CEO John Chambers said sales in Europe were weaker than expected, particularly in the U.K.

"We did get surprised," he acknowledged on a conference call to analysts. "If Europe had been where we expected it to be we'd have had one heck of a quarter."

Said Stephen Kamman, an analyst with CIBC World Markets, "I think Cisco has decided not to be a hero here. They're looking at Europe, and they're not sure how it's going to come out – you either make a promise that you can't deliver in (the current quarter) or make a promise you know you can deliver and look to do better. I think they're looking to do better."

Interestingly, the company did not pull back from its earlier full-year 2006 guidance of between 10 and 12 percent revenue growth over the previous year. During the conference call, analysts peppered Cisco executives with tough questions on how the company expects to meet its full-year guidance with such weak growth in the first quarter.

While guidance for the current quarter disappointed the Street, results for the previous quarter did not.

Cisco Systems reported sales of $6.5 billion, a 9.7 percent increase over the year-ago quarter and just below Wall Street analysts' forecast of $6.58 billion, according to a Thomson FirstCall survey of analysts. The company posted pro forma earnings per share of $0.25, excluding an expense for stock options, beating Wall Street's forecast by a penny, according to Thomson.

This is the first quarter in which Cisco included the compensation expense, which shrunk its profits. Including the expenses, the company's net income for the fiscal first quarter of 2006 was $1.3 billion, or 20 cents per share, compared with $1.4 billion, or 21 cents a share, in the same quarter a year ago, which excluded the options expenses. Cisco said it would have earned net income of $1.1 billion, or 17 cents a share, in the same quarter a year ago if it had included the expenses.

"Q1 was a solid quarter for Cisco, with balanced execution across most of our geographies, market segments and product categories," said John Chambers, president and CEO, Cisco Systems, Inc., in a prepared statement. "We are especially pleased with the improving business momentum in the U.S. and Asia Pacific, the strength of our product families and the accelerated growth of the commercial marketplace, which has become our fastest growing customer segment."

Cisco's pro forma gross margin, a key measure of profitability, was better than expected at 68.1 percent.

Another bright spot on the call: Cisco announced plans to ramp up growth in its Advanced Technologies businesses, which provide more growth potential to the company than its more mature routers and switches businesses. Cisco said it will introduce a new technology every three to four months for the rest of the fiscal year, including two by the end of the calendar year.

Overall, Cisco has failed to please investors this year, despite good growth and solid fundamentals.

People who are bullish on the stock are wondering when the Street will start appreciating the company again.

"They're a dominant company offering very good growth and very little risk, but people come to tech for wild growth and tons of risk," said Stephen Kamman, an analyst with CIBC World Markets. "Wall Street seems to have put them in an odd twilight zone where anything they do doesn't seem to help."

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None of the analysts quoted in this story own shares of Cisco, and their firms do not have banking ties to the company.