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Cisco (Nasdaq:CSCO): Behind The Green Door…Why Cisco Earnings Don’t Matter

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John Chambers may as well be Marilyn Chambers in the Movie Behind The Green Door because his company has managed earnings with Wall Street about as good as any company in history, it is a classic play where a CEO understands that his stock is currency and it is about how much revenue they produce and that the multiple for their sector (in this case technology) stays stable. 

Companies actually dont need to have explosive growth to be successful, they just need to be predictable in their growth so the market understands them.  Cisco has range traded in 2010 between 20 and 26 so essentially they have only traded up or down 30% from top to bottom.  Their stock price really doesn’t matter.  What matters is how they guide revenue for upcoming quarters (and they never give guidance for more than 1 quarter out) and currently the market should care more about listening what they say about sales then they should about the stock price.  So I suggest you go and listen to the replay of the call..this will help you have an acute understanding of the stock market during these volatile times.

The Labor Department has reported Thursday that the number of people applying for unemployment benefits for the first time rose last week. The gain was small at 2,000, but economists had expected the number to drop.
Meanwhile, Cisco Systems Inc. has added to investors’ anxiety by reporting revenue figures that fell short of forecasts.
The market’s view of the economy keeps growing darker after the Federal Reserve lowered its assessment of the recovery on Tuesday. Stocks dropped sharply Wednesday and sent the Dow Jones industrial average down 265 points.
Stock index futures are down less than an hour before the start of trading. Dow futures are down 65, or 0.63 percent, at 10,272, while Standard & Poor’s 500 futures are down 8.50, or 0.8 percent, at 1,072.50. Nasdaq 100 futures are down 17.50, or 1 percent, at 1,820.25.

For more information visit  http://www.worldmarketmedia.com/779/section.aspx/2224/post/cisco-nasdaqcsco-behind-the-green-doorwhy-cisco-earnings-dont-matter

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