More Sound and Fury From Cisco

Take a deep breath. Cisco (CSCO Quote) says the world is returning to normal, which surely must mean good things for its weather-beaten stock.

(For a look at Cisco's market share, click here.)

CEO John Chambers pleased Wall Streeters at the annual two-day analyst meeting, saying that November orders weren't marred by big cancellations and that numbers so far throughout the fourth quarter have been generally within expectations. With a nod to the need for hard-hitting techspeak, the executive cryptically characterized the month's results as "linear."

But wait, there's more. Chambers, though conceding that Cisco has little "visibility" into customers' ordering plans, continues to see opportunity just over the horizon. He promised Cisco will become twice as efficient in revenue-per-employee terms within five years, while saying he expects the company's $19 billion cash hoard will come in handy for acquisitions in coming years.

Cisco shares rose a penny to $19.87 Tuesday, though they remain more than 60% below their year-ago level.

Of course, Cisco fans remain eternally bullish, egged on by their fearless leader, Chambers. You'll recall that around this time last year, just as the tech market was beginning to sag under the weight of failing upstart telcos, most of the big telecom-equipment firms were starting to ease off their sky's-the-limit forecasts. Some were even signaling a possible need to slow down in case of an extended industrywide spending drought.

That drought, of course, has come to pass. But right through the spring, Chambers continued to claim that Cisco was going to increase revenue at a 30%-50% annual clip, even as other telecom industry execs increasingly spoke of a slowdown and a plateau in what had been a fast-growing industry. Of course, the center couldn't hold, and eventually Cisco skulked into the earnings-shortfall crowd, all the while protesting that hypergrowth would soon return.

But growth hasn't returned, and growth is what Cisco investors are really interested in hearing about. To be sure, Chambers was bullish about cash-rich Cisco's competitive prospects, talking about acquisitions in a number of areas, including voice, storage and optical technologies, and the prospect of winning back market share from upstart competitors. (The latest quarter was Cisco's best ever in terms of market share gains, Chambers said.) And the CEO was a promotional as ever, advising his good friend the federal government that untold tech dollars will go wasted if the country fails to settle on a nationwide plan to deliver broadband to every man, woman and child.

Chambers' comments suggest the networker is far from weak, but that it hasn't exactly hit on the formula for renewed success, either. Sure, aiming for $1 million in annual revenue per employee is impressive, considering the company's current yield is about half that. But growth and cost-cutting are different ballgames, as it were. And when Chambers mentions voice, storage and optical as his growth areas without specifying just how Cisco will prove itself in those markets, investors might wonder what exactly has changed from the last year's floundering.

Maybe normal isn't what Cisco investors need.