Cisco Systems (CSCO) reported a choppy quarter that wasn't nearly as bad as you'd think, looking at the stock tankage today. Profit and sales beat expectations, but the company was hit hard on its outlook for the current quarter.

As I listened to the earnings call Wednesday, I was struck by how many times executives used the word "challenges." It was like every mention took the stock down a little further in after-hours trading.

Now the transcript is available on Seeking Alpha and I can get an official count. Number of times "challenges" was used: 26.

Government business was called out repeatedly as being down. Orders from the U.S. government dropped 25% year over year, and state government business fell 48% from the previous quarter. Post continues after video:
Momentum was similarly down in the Japanese government business and in orders from some European governments, executives said.

The public sector is a big chunk of Cisco's business -- about 22% of total product orders in the first quarter -- and the company said this area will continue to be "challenging" for several more quarters at least.

Cisco shares were down more than 15% in midday trading, pressuring other tech stocks and weighing on the overall market.

More from MSN Money:

• Cisco's profit margin fails to impress
• Weak Cisco outlook hammers stocks