Market Deserves More Credit for Cisco's Rally

It's too bad that in the coverage of an adequately decent quarterly report by Cisco(CSCO Quote), we see a few basic examples of the business media's not telling the whole story. In some cases, they were too positive. In others, they weren't positive enough.

Let's go to the videotape. Uh, I mean to the pixels.

Excluding special items, Cisco's earnings were a penny ahead of the 39 cents expected, and revenues, at $10.4 billion, were a hair better than the $10.3 billion expected. The company was a bit cautious going forward, though not as cautious as some had feared. The point, though, is that this is not your grandfather's Cisco anymore -- and that's a good thing, because it helped save the company.

They Just Don't Get Cisco!

But read Reuters' coverage of the quarter, and you'll think it was only the old Cisco standby -- the router and switch business -- that spurred the company on to its modest passing of expectations in both top- and bottom-line results. In fact, you won't come across references to anything other than the router and switch business unless you stay awake until the last two sentences.

A central part of the story here, though, is that the traditional router and switch business, which accounts for nearly two-thirds of revenue, grew in the single digits whereas the teens had been the norm -- and Cisco still lived to tell about it. The company even beat expectations. This is good news and should be spelled out, not remanded to an afterthought.