The Premier League champions and last season’s losing finalists dispatched the Portuguese giants 5-0 at their own backyard thanks to goals from Bernardo Silva, Riyad Mahrez, Phil Foden and Raheem Sterling.
City were 4-0 up by the time the half time whistle went, becoming the first team in Champions League history to be so far ahead before the break in an away knockout tie.
Guardiola was impressed by his side’s ruthlessness in front of goal but was alarmed by the number of times they gave away possession.
Asked if it was a perfect performance, Guardiola told BT Sport: "No. Some players underperformed and we lost easy balls, but we were so clinical.
"We saw in the first five or six minutes how good Sporting are. The difference between the two teams is not 5-0 but we were so clinical. We punished them.
"There is one rule in football when you have the ball and that's not to lose it. We had some simple passes that we lost. Against the top sides in Europe we would be punished.
"It's just a game with a fantastic result. We have one more game to be in the quarter-finals and this is what you want but the players know with me and the way we work that we can do better.
"I'm incredibly happy, please don't misunderstand me, but we can do better."
