The rose-colored glasses are off, but like everyone else,

Cisco

(CSCO) - Get Report

is still having trouble seeing through the tech-spending fog.

The big maker of gear for communications networks is likely to match fiscal third-quarter earnings expectations Tuesday, analysts agree. But given the state of IT spending and the economy in general, investors craving an upbeat forecast to end the recent tech selloff are likely to be disappointed.

While Cisco is better-insulated than rivals like

Lucent

(LU)

and

Nortel

(NT)

from the telecom meltdown -- the San Jose, Calif., company sells most of its gear to business customers building internal networks, rather than to telcos -- information technology spending is hardly growing like gangbusters either. So the word on this onetime highflier is steady as she goes -- a far cry from the rocket-fueled growth the company was promising just over a year ago and not exactly the thing investors' dreams are made of.

"Nothing particularly exciting is going to come out of these guys," said Chet White, an analyst at Wells Fargo Securities, which doesn't have a banking relationship with Cisco. Weighed down by sentiments like these, Cisco dropped 25 cents Monday to $12.89.

Standing Out

As always, Tuesday's Cisco earnings report stands out as a Wall Street event, even as the

Federal Reserve

meets to mull over interest rate policy and as earnings season draws to a whimpering close. Analysts expect Cisco to earn 9 cents a share for its third quarter on revenue of $4.87 billion, according to Thomson Financial/First Call. That's up from 3 cents a share on sales of $4.72 billion, in the year-ago period.

The crux of the problem for Cisco investors is that even if the company hits those estimates, as most people feel sure it will, a year-over-year comparison shows Cisco is barely growing at all. And a sense that Cisco's unlikely to guide Wall Street beyond snaillike growth is gnawing at investors who have sold the stock to within 20% of its 52-week low. Even after falling 34% over the past year, the stock trades at a rich 40 times expected earnings.

Like most of its rivals in the slowdown-saddled tech and telecom sectors, Cisco is feeling a bit of forecasting vertigo nowadays. Time was that the company promised investors it could grow 30% to 50% a year even in a recession; lately, however, John Chambers & Co. have been mostly mum as growth has slowed to a trickle following a precipitous reversal.

"Visibility will continue to be limited, as it has been for the past several quarters," says Ilya Grozovsky, an analyst at SoundView Technology. "So they will only talk about a quarter out."

Grozovsky expects Cisco to say revenue will be "flat to up" next quarter, continuing the recent trend in that direction. Analysts expect Cisco to earn 10 cents a share in the fourth quarter on revenue of $5.02 billion. (SoundView doesn't have a banking relationship with Cisco, but rates the stock a strong buy.)

Falling

Of course, just because investors are coming to grips with Cisco's slowing business doesn't mean there still aren't some worries about how the quarter will turn out. Over the past month, the market was rife with jitters about a Cisco preannouncement that never came to pass. Those worries sent the stock

into a tizzy in April; since then, Cisco is down 26%.

That selloff has coincided with an acceleration of the decline in telecom spending and an increase in worries about telcos' debt payments. Because Cisco does just 15% of its business with the communications industry, the company doesn't figure to be terribly hurt by the latest falloff. But neither is it totally immune.

"Cisco is certainly affected by telecom problems, but to a much lesser degree than they were a year ago," says Grozovsky. "They are more tied to the performance of

Fortune

500 companies."

On the

Fortune

500 front, there hasn't been a whole lot of good news. Enterprise spending remains at low levels, with few signs of an imminent bounce. In a recent survey on IT spending by Goldman Sachs, two-thirds of the managers polled said they did not expect spending to return until 2003 or beyond.

As a result, many analysts expect to see next year's 16% sales-growth consensus forecast coming down. And if sales growth expectations keep sliding, there's little reason to expect the stock to do otherwise.

"The strong economic recovery that people expected is now being called into doubt," says Ted Jackson, an analyst at U.S. Bancorp Piper Jaffray, which hasn't done banking for Cisco and rates its stock market perform. "The question is, how much of a rebound will we get?"