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Investors are hoping

Cisco Systems'


hot hand in a few key markets will be enough to steady the

slipping tech giant.

Cisco is due to report fiscal third-quarter numbers after the close Tuesday. Given the recent

travails of rival gearmakers, many observers say they are expecting a glum performance from Cisco's core computer networking business.

But saving the day on the earnings front, analysts predict, will be a collection of popular products that Cisco has branched into over the past few years.

"It's going to be a little dull, but Cisco is resilient," says Scott Clavenna, a Boston-based analyst with, a New York research shop. "Whatever weakness they may have had in the enterprise will be made up for by strong performance in some of their advanced technologies group."

Cisco has seen a steady increase in competition from new players like China's


and PC giant



. Those challenges come on top of a longstanding rivalries like the one Cisco has had with core router maker

Juniper Networks


. Routers are large sorting devices that help manage Internet traffic.

In recent years, Cisco has ventured into new technologies in search of fresh markets to restart its stagnant sales growth.

And indeed, Cisco has made strides with efforts like its Linksys unit, which makes wireless networking gear for consumers and small businesses. Cisco has also seen gains in Internet office phone systems and is aiming to revive its offerings in the mega-router arena. Those pushes give some observers confidence that Cisco is staying at least half a step ahead of the price-cutting competition that has invaded its switching and routing market.

Wall Street analysts also predict that the new growth gear is gaining popularity and may start to emerge as Cisco's silver lining.

"The segment that may outshine for Cisco is its Advanced Technology group," RBC Capital Markets analyst Mark Sue wrote in a research note Monday. Sue, who rates the stock buy, expects the unit's year-over-year sales growth to rise to 22% in the latest quarter from 19% in the sequentially previous period.

For the fiscal third quarter ended last month, Wall Street is looking for Cisco, a holding in Cody Willard's

Telecom Connection

model portfolio, to make 22 cents a share on sales of $6.15 billion. Those numbers compare to 21 cents on $6.01 billion in revenue in the second quarter.

Looking ahead to Cisco's fiscal fourth quarter, which ends in July, analysts expect a 22-cent profit on $6.5 billion in sales. That's a penny improvement on the bottom line and 5% top-line growth over the prior quarter's levels.

Many Cisco watchers will also be eyeing the gross margins line. Price cuts by upstarts have helped narrow Cisco's once-lush margins to 66.8% in the fiscal second quarter ended in January. That's down from 70.8% two years ago.

But's Clavenna doesn't expect investors to be too disappointed.

"I expect no big weakness in any particular places," says Clavenna.