9:05 AM -- I painted the Cisco Systems Inc. (Nasdaq: CSCO) fourth-quarter forecast, issued Wednesday, as a pleasant surprise. (See Cisco Offers Light in the Gloom.) I feel like I should stress that things are still bad, just with signs that the badness isn't worsening.

Cisco beat expectations with that forecast, and it's predicting growth compared with the third quarter -- but it's still likely to experience its biggest year-to-year revenue dip of the downturn so far.

Table 1: Cisco's Revenue Growth

The real key is that business didn't worsen during the third quarter. Specifically, each month's "growth" in orders, compared with the previous year, was about the same, CEO John Chambers says.

Contrast that with the January quarter:

Table 2: Q2 Was Sinking

That the third quarter "followed normalcy" (as Chambers worded it), combined with the stabilization that companies like Juniper Networks Inc. (NYSE: JNPR) claim to be seeing, adds up to a good sign, relatively. Chambers is right in saying business has to flatten out before it recovers.

Here's an interesting side note: Chambers still says long-term revenue growth can be 12 to 17 percent per year. He stuck to that figure during Wednesday's earnings call, although he hinted that investors and fellow executives have told him to stop saying that.

It's still plausible; the 12 to 17 percent is a relative figure, so it stays achievable no matter how far down Cisco's revenues go. And while it seems a lifetime ago, Cisco did see revenues climb 13 percent during fiscal 2008. But you can't blame investors if they think the prediction is all leprechauns and unicorns right now.

— Craig Matsumoto, West Coast Editor, Light Reading