Biz media fails to meet analyst expectations
TheStreet.com media critic Marek Fuchs writes Wednesday that business news stories about Cisco’s recent earnings have the company meeting analyst expectations — but only because the company lowered expectations, which isn’t mentioned or buried in most stories.
Fuchs writes, “Revenue was also ‘jumping’ at TheStreet.com, which wrote that the $9.8 billion, came in ‘slightly above Wall Street’s estimate of $9.75 billion.’ Technically true, but you have to read down three paragraphs to get the meaningful caveat. Snooze and you lose:
‘Traders had been on edge after Chambers reduced expectations for revenue in the fiscal third quarter. On the company’s last conference call, Chambers cut Cisco’s fiscal third-quarter guidance to 10% growth, down from the 15% previously expected.’
“Read The San Jose Mercury News and it’s as if the company never lowered top line expectations. Here’s the headline, ‘Positive numbers for Cisco: GROWTH FOR QUARTER EXCEEDS EXPECTATIONS’ and here’s the lead: ‘Cisco Systems, often considered a bellwether for the health of the technology sector, reported third-quarter growth on Tuesday that exceeded expectations.’
“True enough on the profit side. But that revenue? The way the company ratcheted them down only three months ago? Is it mentioned anywhere in the body of the article? No.”
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