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After the close of trading on Tuesday, we’ll get to see earnings out of Cisco Systems, Inc. (NASDAQ: CSCO). The estimates for the networking giant from First Call are $0.36 EPS on $9.75 billion in revenues.  Next quarter estimates are $0.39 EPS on $10.30 billion in revenues. Estimates for fiscal July-2008 are $1.54 EPS on $39.43 billion in revenues. Estimates for fiscal July-2009 are $1.69 EPS on $43.93 billion in revenues.

When we interpolated the company’s guidance last quarter, that was an implied $9.75 Billion.   That is ‘coincidentally’ the same that First Call has today.  But at the time, the First Call estimate was $10.2 Billion.  So estimates have come well down since then.

Analysts have an average price target north of $28.25, lower than in prior quarters.  Over the last 90-days, estimates have come down for this quarter report, but forward estimates have not been lowered by quite as much.  It seems that analysts are going to pay attention to financial orders and enterprise spending, plus they will focus on whether or not the networking giant is seeing any signs of a slowdown from the top emerging markets that are adding so much growth.

Cisco shares are actually up more than 19% from the post-earnings lows of the last quarter when shares briefly challenged $22.00.  Its 50-day moving average is under current prices at $24.66 and its 200-day moving average is above current prices at $27.97.

Cisco’s 52-week range is $21.77 to $34.24.  As many smaller networking companies and operators have been issuing warnings or have gotten more cautious, it will be paramount for the sector to see what comes from John Chambers this quarter.

Just last month, Lazard initiated coverage with a Buy rating, and shortly before that it was FBR that initiated Cisco with an Outperform rating.

Jon C. Ogg
May 5, 2008