Beaten Traders Brace for Cisco

Cisco (CSCO - Cramer's Take - Stockpickr) takes the stage as tech investors plead for some reassurance.

The San Jose, Calif., networking gearmaker will post its fiscal second-quarter numbers after the market closes Wednesday and Wall Street hopes the results can calm a jittery market and stop Cisco's skid.

Cisco shares are down nearly one-third in the past three months amid growing concerns about a spending slowdown and a weakening economy.

Against the market's broad selloff on Tuesday, Cisco closed down 56 cents, or 2.4%, to $23.26.

News You Need: Cisco, Metlife

Industry observers are expecting solid numbers from Cisco, and while CEO John Chambers may confirm that U.S. companies are pinching technology upgrade pennies, he's likely to repeat his assessment that global demand for Net gear is healthy.

JPMorgan analyst Ehud Gelblum writes in a preview note that he doesn't expect Cisco to change its guidance for the year of revenue growth between 13% and 16%. But as Chambers shares his outlook with analysts and investors, Gelblum says: "We expect commentary on Wednesday's conference call to imply the very top of that range for the full fiscal year based on the diversity of Cisco's various revenue streams."

Some investors take confidence from Internet equipment rival Juniper (JNPR - Cramer's Take - Stockpickr), which posted a strong fourth-quarter performance and raised its 2008 guidance. Juniper and Cisco sell big routers that telcos like Verizon (VZ - Cramer's Take - Stockpickr) and AT&T (T - Cramer's Take - Stockpickr) use to manage surging network traffic.

Analysts expect Cisco to report an adjusted profit of 38 cents a share on $9.79 billion in sales for the quarter ended last month, according to Yahoo! Finance.

But as always, the Street's focus is on what's ahead, and much of that sentiment will be determined by Chambers' tone.

"We're looking for guarded optimism and a message of geographic and customer balance with a dose of market share gains," writes RBC analyst Mark Sue in a research note. "Growth outside the U.S. remains strong and global balance may enable Cisco to better weather the current tech spending uncertainty," Sue concludes.

Analysts expect 4% top-line sequential growth in Cisco's current quarter ending in April. Anything that suggests Cisco isn't keeping pace with those expectations will send more investors toward the exits.