The news from Cisco was a kind of Goldilocks earnings report: in-line earnings per share of 38 cents, which might be a disappointment to the big bulls out there hearing whispers of something north of 40 cents.
A small upside surprise on the topline to the tune of $30 million: $9.83 billion instead of the consensus of $9.8 billion the Street was looking for. Until the guidance. Ouch.
On the conference call, Chief Executive John Chambers dropped a bombshell of sorts, calling the forecast of upcoming quarters "extremely challenging." He went on to say, after several minutes of clarification and set-up, that he expects 10 percent growth for the company's third quarter. The Street's prediction was 13 percent to 16 percent.
Worse, Chambers says he anticipates January's order growth rate to continue for the next several quarters.
"Cisco will always be affected by major economic changes," he says. "There may be times when our revenue growth is above the 12 percent to 17 percent range, and times that it will be below that range."
But he remains optimistic even though his key takeaway from his visit to the recent World Economic Forum was one of caution.