Bullish Talk from Cisco

By Mark Evans | Published: August 6, 2008

While Nortel talked about a “challenging” business environment after posting its second-quarter results last week, Cisco took a markedly different stance after posting solid fiscal fourth quarter results yesterday.

Cisco said it had “very strong” confidence in its long-term growth targets of 12% to 17%, while Cisco CEO John Chambers added that: “During each economic slowdown, Cisco has always navigated through them very effectively, gained wallet share and in my opinion market share”.

If anything, it’s an interesting study in contrasts.

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  • commentor

    Facts are facts, and the facts are that Nortel issues are not related to macro economics. It is all about the poor managemenent and leadership which lacks the touch and feel of the market. Nortel knew for long long time that the NA market is slow, yet did very little to grow its global market share.

    Just a simple scan for Nortel Sales team size in the emergiing markets confirmed what I mentioned above. Contrast that to Cisco and Huawei who are investing heavy in customer facing account teams in emerging markets while MikeZ is investing in more 6 Segma and PMs.

    MikeZ (and his team of world class useless Execs) had his time and he missed every singnal in the past 3 years. He have nothing new, the sooner he goes the better.

  • Nortelhand

    It is all managements fault. Mike Z came in and starting cutting the company up. He sold stuff that was making money instead of phasing it out. So what can we expect? More of the same losses, more of the same talk, more of how Nortel is growing, more of the sad truth hidden under all the metrics Mike Z is so found of. And the only thing that anyone should be fond of is earnings per share; that is what a company is graded on.
    You did a great job Mike. Hope you have enjoyed wiping out the shareholders money and stuffing your pockets at the same time.

  • Travel Agent

    Maybe Mike Z will soon be going on vacation with Pat Russo. Carly Fiorina and a bevy of Nortel execs (those not in the clink)…

  • Observer

    Does anyone trust Cisco's numbers ? Wall Street has turned to perception management in order to manage equity prices. Its the only way Chambers or any other CEO will walk off with more money. If Cisco is so effective at navigating thru economic slowdowns, why is the stock price languishing in the mid-20s (on average) for 5 years.

    I think the banking system is so fraught with deception, lies and outright fraud that no company's books can really be trusted since the money is managed by banks like Citigroup.

    Nothing will stop the global depression despite what you may see on the news.

  • broadbandbill

    Observer,

    Everyone knows that 'The House' has the advantage; the trick is to manage based on the same rules as everyone else. You are correct stating that CSCO has not increased in value; conversely they have not lost any either, which is second-best in a crappy economic market.

    The key difference is that CSCO has ‘Vision’ (albeit a superficial one) while NT has 'Processes'. Vision, even a superficial one, will ALWAYS outdo ‘Processes’. As we say in LALA land — people (read: investors) want stories and Chambers tells some great ones…and a few tall ones as well. No one wants to hear a ‘Process story’ except for the ones that want to tell such stories. That makes NT out of touch with reality…

    bb

  • Observer

    bb – you are incorrect in stating csco has not lost value. They are down about 30% from their highs in the last 5 years during the most recent credit bubble.

    I never compare(d) Cisco to Nortel. They are in two different leagues now. The fraud is all the same no matter where you go. The masses would be better off buying some gold and silver and keeping it at home. All this fiat printing around the globe the last 8 years will end in tears.

  • broadbandbill

    Observer,

    I believe it is your data that is incorrect; see NASDAQ numbers below (closing price bold). As they say, the numbers speak very loudly (NT's are reverse-split adjusted).

    Date Open High Low Close/Last Volume

    CSCO
    08/06/2003 17.92 18.036 17.53 17.65 127,295,100
    08/06/2008 23.94 24.25 23.46 23.93 121,696,600
    ============================================================
    NT
    08/06/2003 29.00 29.00 27.50 28.40 3,032,270
    08/06/2008 6.15 6.16 6.01 6.12 8,361,258

  • broadbandbill

    To clarify, CSCO closed at $17.65 on 08/06/03 and $23.93 on 08/06/08 while NT went from $28.40 to $6.12 during the same period.

  • less

    http://finance.google.com/finance?client=ob&q=N…

    I compare NT to CSC0 stock within the 10 year frame and get

    NT -98.92%
    CSCO +49.95%

  • Observer

    broadbandbill – again I never compared NT and CSCO. I think Cisco's stock price has been weak overall the last several years. In a secular bear market which is to last for another 7 years even good companies get punished with below average to weak returns. Cisco is down 30% from their high in the most recent credit cycle.

  • shame

    “In a secular bear market which is to last for another 7 years”

    …which is based on what science, exactly?

  • less

    Free phones for the proletariat!!!!

    http://www.taridium.com/?landing=nortel&gclid=C…

    “Why choose a Taridium Business Phone System over Nortel? Half the price double the features vs. Nortel…”

  • Curious

    But how green are they?

  • less

    Made from compressed hemp with hamsters in wheels providing free electricity.

    I take it Nortel would argue that I should go ahead and buy their more expensive phones with less features but which will lower my electricity bill “down the road”.

    Whats the Nortel timeframe -10 years?

  • Curious

    But how green are they?

  • less

    Made from compressed hemp with hamsters in wheels providing free electricity.

    I take it Nortel would argue that I should go ahead and buy their more expensive phones with less features but which will lower my electricity bill “down the road”.

    Whats the Nortel timeframe -10 years?

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