The Real Sting In Cisco's Numbers

It's reality time in the New Economy as the shape of the downturn comes into focus. Chances of a quick "V-shaped" business cycle--a quick, sharp downturn followed by a quick, sharp bounceback--are increasingly slender. Cisco Systems' unexpected earnings report, which forecasts declining profits growth for the next two quarters, is a good indication that the slowdown will extend well into the second half of 2001 (pages 32, 85). CEOs who believed that their new information technologies would protect them from surprises in the business cycle are themselves being surprised by the recent turn of events. It is a moment to be humble.

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