Updated from May 6Cisco's ( CSCO) John Chambers keeps trying to manage expectations, but Wall Street tends to be an unruly bunch. Reinforcing nuance to the point of obviousness, the Cisco CEO emphasized that there has been progress in the struggle to return to consistent sales growth. Keeping his noted cheeriness mostly bottled up, Chambers sought to sell investors Tuesday night on a modestly bullish view of the rest of the year. Impressively, he pursued this goal by noting the "slight upward bias" in the company's fourth-quarter forecast -- one that, as expected, calls for sales to stay flat with third-quarter levels. For his part, Chambers pointed out that there's a world of difference between flat sales and the past three quarters of sliding sales. But the exec's mixed if upbeat-sounding message wasn't quite the tonic that growth-starved tech investors were looking for, even if it did come after the company posted solid third-quarter results. On Wednesday morning, Cisco slid 37 cents to $15.53.
Going into Tuesday's earnings, some investors had convinced themselves that the San Jose, Calif., networking king would raise guidance for the fourth quarter. On the earnings call, Chambers emphasized that he is now "a little more cautiously optimistic" in his outlook for the fourth quarter. He predicted a slight increase in orders, which signals a possible return of a healthy bookings to shipments ratio or book-to-bill, which has been anemic in the past few quarters. On the other hand, Chambers has been known to be generous in his assessment of the company's prospects in the past. Moreover, Cisco's own data don't appear to whole-heartedly support the bullish view: The company said Tuesday that its book-to-bill ratio remained below 1 for the third quarter. And Chambers himself predicted fourth-quarter profits of 13 cents a share, a penny shy of what Wall Street projects.