Cisco on Deck: Don't Expect Any Miracles

White expects Cisco to meet his earnings projection of 45 cents a share, while Paul Mansky of Cantor Fitzgerald expects the switch maker to match Wall Street's 46-cent forecast. Nomura's Sherlund believes that tight cost controls should help the company meet its outlook for a profit of 45 to 47 cents a share.

Cisco's guidance, however, will also be under the microscope, as investors weigh the likely duration of IT spending pressure. Analysts surveyed by Thomson Reuters are looking for fiscal second-quarter revenue of $12.02 billion and earnings of 47 cents a share.

"[We]do believe FQ2'13 guidance is likely to disappoint and expect 2013 to be a tough year as macro pressures persist (weak enterprise and gov't spending, Europe, etc.)," wrote JPMorgan analyst Rod Hall, in a recent note. "We also believe longer term SDN and competitive risks will keep a lid on Cisco's P/E multiple."

SDN refers to Software-Defined Networking, a set of techniques for managing network traffic flows through software, which is increasingly touted by the likes of Cisco and its networking rival HP (HPQ).

Hall, who recently downgraded Cisco to neutral, adds that "battered telco equipment names" like Ciena (CIEN) and smartphone and tablet-focused Qualcomm (QCOM) look "incrementally better" for 2013.

Topeka Capital Markets' White, however, has a buy rating on the tech giant. "Cisco is trading at just 5.8x (excash) our CY13 EPS estimate, sports a 3.3% dividend yield and trades below the 2009 trough downturn price-to-tangible book value, providing some downside support," he wrote, in a recent note.

Cisco shares, which are off 7.35% this year, were down 0.59% to $16.75 shortly after midday on Tuesday.

--Written by James Rogers in New York.

Follow @jamesjrogers

>To submit a news tip, send an email to: [e-mail].

« First ‹ Previous 1 2