"Extremely challenging" was how Cisco CEO John Chambers described the outlook for the next few quarters, as Cisco Wednesday reported its fiscal second-quarter results that matched analysts' expectations. Sales were up 16.5% year over year with Cisco finishing its most recent quarter with earnings -excluding charges - of $2.4 billion, or 38 cents per share, on $9.8 billion in revenue. Chambers said: ""We are seeing our U.S. and European customers becoming increasingly cautious. This was my key take-away from the World Economic Forum two weeks ago." Cisco expects revenue to grow approximately 10% year over year during the third quarter, Chambers said. Analysts had been expecting revenue growth in the 15% mark. Chambers' cautiousness was a marked change from his bullish remarks of just a month ago when he said 12% to 17% growth was feasible in the forseeable future. Despite the gloom there was some spark of optimism - Chambers said the lower valuations of tech companies could help Cisco pick up bargains as it continues to hunt for more acquisitions.

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