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Cisco Gets Stronger Demand for Gear: Earnings Preview

Nonetheless, Passi predicts that Cisco will meet or exceed second-quarter estimates as the company's management continues to reshape its business, exiting less lucrative markets and buying assets that could potentially boost margins and sales efficiency. "We would be buyers especially on any potential weakness given Cisco's compelling valuation and shareholder return profile," he added.

Cisco, which shuttered its Flip video camera business in 2011, is selling off its Linksys home router business. Last month, Playa Vista, Calif.-based Belkin announced its intent to acquire Cisco's home networking business for an undisclosed fee.

At the other end of the M&A spectrum, recent Cisco activity includes a $1.2 billion deal for cloud networking specialist Meraki, which followed a $125 million deal to acquire Cloupia. Last month, Cisco announced its intent to acquire Israeli network software specialist Intucell for $475 million.

Cisco shares, which have climbed more than 24% in the past three months, gained 0.1% to reach $20.99 in Wednesday trading.

-- Written by James Rogers in New York.

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