Cisco shares plunge, set for worst day since 2013

Cisco becomes S&P 500's biggest loser in Thursday's trading

Shares of Cisco's stock were sharply lower on Thursday, after the enterprise technology company announced more job cuts and a worse-than-feared outlook on Wednesday night.

The stock dropped as much as 8 percent, marking the stock's biggest since November 2013.

Cisco said on Wednesday that it will cut an additional 1,100 employees as part of an expanded restructuring plan. The cuts come on top of the 5,500 job cuts, or 7 percent of its workforce, announced in August 2016.

The announcement came as the company reported better-than-expected earnings for the fiscal third quarter, but an outlook for the fiscal fourth quarter that fell well short of estimates.

"We saw a significant slowdown in the U.S. public sector, particularly the federal business — which is a pretty significant business for us — due to the uncertainty in budgets," CEO Chuck Robbins told CNBC on Thursday.

Cisco CEO on transition to software and subscription

Cisco posted adjusted earnings of 60 cents per share, excluding items, on revenue of $11.94 billion. That's higher than the 58 cents per share on $11.89 billion revenue expected by a Thomson Reuters consensus estimate.

But Cisco said it expects revenues to fall 4 percent to 6 percent year-over-year in the fourth quarter, with earnings of 60 cents to 62 cents per share, adjusted. Analysts expected Cisco's revenue to decline just 1 percent in the fourth quarter, and predicted a midpoint of 62 cents per share for earnings.

"It's one quarter, and we are very focused on continuing this transition," Robbins said. "I think we're gonna be fine."

With its specialties in networking and cybersecurity, Cisco had been seen as a prime beneficiary of proposals by President Donald Trump's administration, particularly tax reform, Drexel Hamilton analyst Brian White said earlier this month.

But as news surrounding Trump's firing of FBI Director James Comey unfolded this week, U.S. stocks saw a "removal of any Trump premium," Randy Warren, chief investment officer at Warren Financial, told CNBC.

— CNBC's Chantel McGee and Fred Imbert contributed to this report