Analysts Again Say Cisco's Worst May Be Behind It

When you're a kid with an upset tummy, throwing up can make you feel better. Analysts took the same line on Cisco's (CSCO) latest earnings warning, viewing the company's nearly $2.5 billion charge the company announced as a necessary act that could mark the end of an illness.

The networking giant yesterday after the close announced an inventory write-off of $2.5 billion and said revenues would be down 30% from the previous quarter. But, despite the horrible sales figures and massive inventory overhang, Goldman Sachs' Nathaniel Cohn this morning told his clients the worst is probably over. Cisco, he said, will feel better from here on out.

"It is more likely that news flow from here becomes incrementally more positive or less negative, depending on how one looks at it," Cohn wrote this morning. "As a result, we could see the stocks begin to trade higher through the coming quarter as inventory continues to get worked through and demand begins to uptick slightly from these depressed levels." ...