San Francisco - Networking giant Cisco Systems held quarterly profits stable at 2.2 billion, it said Wednesday. But the Silicon Valley bellwether warned that the challenging economy would drop fiscal second quarter revenues by between 5 and 10 per cent.

The company posted revenues for the quarter of 10.3 billion dollars, up 8 per cent for the same period last year.

Cisco is being hit by the economic challenges that many other companies are seeing, CEO John Chambers said in a conference call. In particular, orders declined in the US, UK and the rest of Western Europe, he said. Chambers added that he believes the US will be the first country to recover from the downturn.