Analysts at Merrill Lynch are defending Cisco Systems(CSCO), saying sources and channel checks indicate the networking giant is unlikely to issue an earnings warning at this point in the quarter.
On Tuesday, Cisco's shares fell $1.36 a share to $14.82 in extremely heavy volume as rumors circulated that it would preannounce a disappointing third quarter.
According to Merrill, sources and channel checks show Cisco is executing effectively in a poor IT-spending environment, although the final weeks of the quarter will be crucial. Another firm, Needham & Co., upgraded the stock to a buy from hold and raised its price target to $18 a share.
The positive comments were lifting Cisco's shares in the premarket session. On Island, they were recently gaining 35 cents, or 2.4%, to $15.17.
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