As I wrote in Reality Check this morning, the company remains yellow-flagged on the Reality Check Watch List because of what would appear to be a pipeline stuffed with too much unsold inventory. Much of that, as I point out, is stealth and off the company's balance sheet.
But like grasping at straws, this is a market that wants to find the silver lining whenever possible and give companies that are "less bad," even if it's still bad, the benefit of the doubt.
So despite revenue falling 5.5% -- the second straight quarter of negative revenue growth -- Wall Street preferred to view the decline as better-than-expected and go along with CEO John Chambers' comment that he is "pleased with the progress to return to growth."
Never mind that we've seen this before, with Chambers steering investors down a dusty dirt road:
- May 2013, with comments that caused the stock to zoom: "Cisco is executing at a very high level in a slow, but steady economic environment. We are especially pleased with our ninth consecutive record revenue quarter. We are starting to see some good signs in the US and other parts of the world which are encouraging."
- August 2013: "My confidence in our ability to be the #1 IT Company is increasing." (The stock tumbled on guidance.)
- November 2013: "While our revenue growth was below our expectation..." The stock collapsed.