Europe was a sore spot for Cisco Systems Inc. in the company's first quarter and will "get worse before it gets better," CEO John Chambers said on Tuesday's earnings call.

It's the one blemish on an otherwise sunny outlook, as Cisco saw business recovering in other geographies and most of its business segments. (See Cisco Nets $2.1B in a Predictable Q1.)

Cisco's revenues from European service providers were down 19 percent compared with last year's first quarter, Chambers said. (Cisco's first quarter ends in October.)

Cisco's revenues from U.S. service providers were up 13 percent from a year ago. But worldwide, the company's service-provider sales were up only 3 percent.

Most other categories saw growth for Cisco, especially the U.S. enterprise market, which was up 9 percent. The big downer was the U.S. federal market, which dipped 15 percent in the first quarter, compared with the same quarter a year ago. Cisco expected that one, though, Chambers said.

Overall, Cisco expects revenues for its second quarter, which ends in January, to be $11.93 billion to $12.16 billion. The midpoint of that range would be $12.05 billion, which is just better than the $12.02 billion that analysts were expecting, according to Thomson Reuters.

Separately, Chambers made a sidelong reference to the increasing friction between the U.S. and China, noting that Cisco still counts China as a buddy. "We have invested a lot of resources and innovation in China for the last 20 years, and our commitment to China has not diminished in any way," he said. (See China Lashes Out at 'Cold War Mentality', Cisco Feels Security Heat in China and US vs Huawei/ZTE: The Verdict.)

— Craig Matsumoto, Managing Editor, Light Reading