Cisco Says CEO Didn't Predict Recovery

John Chambers' comments to European reporters were misinterpreted, the company says.
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Updated from 8:47 a.m. EDT

Communications equipment stocks gave back some ground Wednesday after

Cisco

(CSCO) - Get Report

disavowed a media report saying CEO John Chambers had forecast an imminent uptick in information technology spending.

Shares in the networking sector rose sharply early in the session following a report in the Dutch daily

Het Financieele Dagblad

. That article, which quoted Chambers as saying IT spending would pick up in the next two to four months, was picked up by

Reuters

and other U.S. news agencies. Investors took the report as a bullish sign, because even though Chambers has repeatedly indicated that he believes in the industry's long-term prospects, he has stopped short of saying a recovery is imminent.

But around midday a Cisco spokeswoman told

Reuters

that the Dutch paper had misconstrued Chambers' remarks, which he made last evening to a group of reporters in San Jose. She said Chambers was merely reiterating his long-held stance that industrywide spending will start rising about two to four months after IT customers begin to see their own businesses turning up, whenever that is.

Shares in Cisco and rivals such as

Ciena

(CIEN) - Get Report

rose sharply early Wednesday before retreating at midday to smaller gains. Cisco was up 26 cents, to $18.99, while Ciena was 39 cents higher at $6.14.