Cisco Beats; But Will It Also Raise?

Cisco shares jumped 19 percent on the quarter, mostly on the heels of CEO John Chambers' comments at the conclusion of the company's third quarter report that trends were suggesting something positive, or at least stable, in global IT spending.

Today, the company offered up some numbers to back that up, as well as a taste of what might be coming on the company's closely guarded conference call where Chambers comments are parsed the way we used to parse the comments from Fed Chairman Alan Greenspan.

Cisco Earnings
Cisco Earnings

For Cisco's fourth quarter, the company reported 31 cents on $8.54 billion in revenue.

The bottom line beat consensus by 2 cents a share, and the whisper number I heard of 30 cents, though Shannon Puls at tells me the whisper he heard was 31 cents so "this was inline with expectations."

The topline was essentially in line with consensus of $8.52 billion.

Still, as soon as these numbers hit the tape, Cisco shares seemed to dip, at least until investors got a chance to read a quote included in the earnings release from Chambers. I read the quote on the air as well, and in what seems like a departure for the company, the earnings release might be tipping Cisco's hand as far as guidance is concerned. The comment that particularly caught my eye: "We saw a number of positive signs this quarter in the economy and in our business, especially comparing our sequential quarter-over-quarter order trends. If we continue to see these positive order trends for the next one to two quarters, we believe there is a good chance we will look back and see that the tipping point occurred in our business in Q4."


Brent Bracelin at Pacific Crest Securities says "it looks like they did a little better than we expected on revenue and earnings, but in line with what people were thinking…It certainly suggests we saw a rebound and that's consistent with what we've been hearing from other component suppliers."

Bracelin tells me that Cisco was the first two see the downturn coming in Oct. 2007, and it's likely this is going to be the first company to really see a turnaround.

Cisco shares are going to hover until we hear more specific from Chambers.

I'll be on Fast Money at 5pEDTto discuss his comments further. And then, if you have access to CNBC Asia, I'll be interviewing Chambers coming up at 710pEDT. We'll be including some of those comments as well coming up on The Kudlow Reportas well.

Questions? Comments?