RESEARCH TRIANGLE PARK — Take a look at these headlines and you will understand why more and more people simply pay less attention to major media these days:

“Cisco Drops on Inventory, Low Growth –“

“Cisco Drops on Tepid growth –“

“Cisco Profits Up But Shares Fall –“

“Cisco Posts Higher Net But Sees Slower Tech Spending –“

“Cisco Returns to Cautious Stance –“

On Tuesday, Cisco’s John Chambers reported the networking giant had its best quarter ever — earnings per share (21 cents), pro-forma net income — and pointed out that its strategy of diversifying (such as home networking and moving into other markets) is producing momentum.

Cisco is the poster child for the tech economy, and expectations were high — maybe too high? — for Chambers’ quarterly review.

So what happens to Cisco (Nasdaq: CSCO) shares after the bell? They dropped $1.24 a share to under $20 and near its 52-week low.

Good grief. What’s going on here? Cisco is not Nortel or Enron. Is it 2001 all over again?

Various analysts cited things as an increase in inventories. They increase $100 million to $1.2 billion. Chambers said he wasn’t “losing any sleep” over the increase and pointed out Cisco wants to be able to meet customer demand more quickly. But a lot of people remember Cisco’s inventory write-down back in 2001 as the telecom and dot com bubbles burst.

Analysts and reporters talked about Chambers’ somewhat cool outlook for sales in the next quarter of flat to 2 percent. Of course, the fact that Chambers pointed out the fall period is usually the company’s slowest made no difference.

Here’s one comment from an analyst that I think sums up the attitude toward Cisco and a lot of other stocks:

“Overall the quarter was on target and if you are searching for something negative, inventories were a little higher than I’d like to see,” said Justin McNichols of Osborne Partners Capital Management, as quoted by Reuters.

I added the emphasis.

The fact is that in these days of growing cynicism, Sarbanes-Oxley, law suits and increasing federal oversight, few people want to get excited about anything any more. Unless, of course, you are trying to get in on the Google IPO.

Look at Red Hat stock (Nasdaq: RHAT). It continues to get hammered despite revised revenue figures that show little change in the uproar over subscription revenues.

By the numbers —

Chambers delivered a report that beat Street expectations by a penny, but that wasn’t enough for some people.

Some Cisco numbers:

  • $5.9 billion in revenues, up 5.4 percent from the previous quarter, which was a good one

  • $1.4 billion in profits — a quarterly record

  • $22 billion in annual revenue

  • 76 cents per share earnings for the year
  • “This was a record-breaking quarter for Cisco on a number of financial and operational levels,” Chambers said. “The investments we’ve made in emerging markets around the world, coupled with continued innovation in our core business and advanced technologies, are generating record results.”

    Even though the Federal Reserve hiked interest rates Tuesday, it reiterated that the economy remains strong. A soft spot due to high energy prices isn’t going to stand in the way of growth, the Fed said.

    Chambers said in a conference call that “In things we can control, I feel very good.” But he added: “I think most of our customers are little bit more cautious … versus what they were a couple months ago. I would not say that’s a major factor.” Of course, the media seized on the “cautious” word.

    He didn’t say frozen in fear, or opposed to capital spending.

    The company also reiterated plans to hire 1,000 people, and the process did begin this most recent quarter with a net increase of some 60 jobs. Not a huge increase by any means, but a step forward. Cisco also wrapped up a couple of other transactions designed to broaden its product reach and intellectual property.

    Chambers back on payroll

    Cisco continues to move aggressively into growth areas such as Internet telephony and storage area networking. It also bought back $9 billion in stock over the past 12 months. The company is also going to start paying Chambers a salary again ($350,000) after he took $1 and no bonus since 2001. Of course, he still has stock options. But as smart as Cisco has been through the good and bad times, the stock buybacks, continued commitment to R&D and the reinstating of Chambers’ signs seem to be solid indications that the company sees continued good times.

    “What people are missing is that Cisco is just punching out really strong growth,” Steve Kamman, an analyst at CIBC World Markets, told Reuters. He said “the market” is expecting the company to deliver more than “the economy is willing to deliver”.

    I have to wonder how much press cynicism has to do with that attitude toward Cisco — and the economy in general.

    To me, the fact the economy continues to growth is remarkable, given all the year 2000 expenses, 9-11-01, the war on terror, oil prices, the corporate scandals plus the lingering fallout of the dot com and telecom bubble bursts. But no matter how good the news on job growth or profits, as in the case of Cisco, the negative gets the most spin.

    The bad news has to be reported. The scandals have to be documented. The corruption needs to be uncovered. The views on stocks have to be based on good information, not hype.

    On the other hand, the good news deserves some attention as well.

    Rick Smith is managing editor of Local Tech Wire.