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
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
(HPQ - Get Report)
Hall, who recently downgraded Cisco to neutral, adds that "battered telco equipment names" like
(CIEN - Get Report)
and smartphone and tablet-focused
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.
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