Shares of Cisco Systems Inc. (Nasdaq: CSCO), the No. 1 supplier of Internet equipment, plunged nearly 11 percent after the company projected weaker-than-expected results for the current quarter. The drop erased $10.4 billion in market capitalization.

By the close, Cisco shares plummeted $1.95  to $16.83, or 10.4 percent, wiping out all Cisco gains in 2012. Shares traded as low as $16.76 during regular trading.

Despite reporting better-than-expected third-quarter earnings,, Cisco executives headed by CEO John T. Chambers told investors Wednesday night they expected fourth-quarter results wouldn't meet estimates.

Per-share earnings will range between 44 cents and 46 cents a share, about 3 cents below prior expectations. As well, revenue probably won't meet the projected $11.9 billion.

Cisco's plunge could hurt the entire technology sector on Thursday, especially Nasdaq, if investors worry that demand for networking products is falling.

A corporate diet, better focus and the explosion of Big Data sent third-quarter earnings up for the San Jose, Calif., giant. It reported third-quarter operating profit rose 14 percent to 48 cents a share, a penny ahead of estimates.

Revenue rose 7 percent to $11.6 billion, higher than the range analysts had predicted.

Net income surged 20 percent to $2.2 billion, or 40 cents a share, also beating estimates.

We delivered solid results this quarter, said Chambers.

At this time last year, Chambers noticed the venerable company, which was the world's most valuable 12 years ago when its market capitalization was $555 billion in the Internet boom, had gotten too fat through acquisitions and was going to suffer from the global economic crisis.

To compete, Cisco announced a $1 billion expense reduction that led to 6,500 employee firings and a new focus on data consolidation and better performance. Subsequently, results for the current fiscal year have steadily improved and Cisco has regained share lost to rivals such as Juniper Networks (Nasdaq: JNPR), the No. 2 provider, Ciena (Nasdaq: CIEN) Hewlett-Packard Co. (NYSE: HPQ)  and others.

Cisco shares have reacted mildly. For the past 52 weeks, they'd gained 6.7 percent; for the year to date, they'd risen 4 percent until Thursday, underperforming the Nasdaq Composite's 11.7 percent jump.

Analysts had expected Cisco's recovery to continue. Fourth-quarter earnings were expected to rise about 4 percent to 49 cents a share as revenue inched up 3.6 percent to $11.9 billion.

At Jefferies, analyst George Notter, noting disappointing projections, maintained a hold rating on the shares, with an $18 price target.

At Sterne Agee, analyst Shaw Wu maintained his buy rating because he believes the company is an underappreciated turnaround story similar to what we have seen with Apple Inc. (Nasdaq: AAPL), International Business Machines Corp. (NYSE: IBM) and EMC Corp. (NYSE: EMC) in the past. Keeping a $27 price target, Wu lowered his full-year earnings forecast a penny $1.84 a share on revenue of $46.3 billion from $48.7 billion.

At Piper Jaffray, analyst Troy Jensen maintained a neutral rating on Cisco while trimming a price target to $20. As well, Jensen wondered if the company could be the canary in the coal mine in dealing with technology spending.

Thursday's plunge lowered Cisco's market value from $101.2 billion to only $90.65 billion.