Back in November, when Cisco reported that instead of a 4% increase in revenues it would have an 8-10% collapse in sales (thank you NSA and Edward Snowden) we penned "Something Is Very Wrong With This Picture." And for those who hadn't seen the chart, we urge you to click on the hyperlink. Moments ago CSCO reported earnings, which just barely beat the already sharply downward revised estimates, but more importantly it provided guidance on what to expected in the next quarter. Well, instead of reporting it, here is a chart of how the Company's guidance looks now and relative to what Goldman was expecting CSCO would sell as recently as November. We like to call the new trendline: Cisco's disastrous new normal.
But that's not the worst news. The worst news, by far, was the following announcement from the conference call:
- CISCO SEES 3Q ADDING DEBT TO FINANCE MATURING BONDS
In other words, issuing incremental debt to fund maturities. We hope, for its sake, that like all the developed world's insolvent governments who do just that, that CSCO stock also doubles as a reserve currency. Then again, judging by the market reaction after hours, the answer is no.