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NEW YORK, Feb 4 (Reuters) – No longer Wall Street’s top
over-achiever, network equipment maker Cisco Systems Inc
(NASDAQ:CSCO) must persuade wary investors it can fight off rivals
such as Hewlett-Packard Co (NYSE:HPQ) and soothe concerns about
public sector spending cuts.

Although most investors forecast modest year-over-year
revenue growth, some said they were approaching Cisco’s
quarterly report next Wednesday with caution after surprisingly
weak forecasts in the past two quarters.

A high dividend payment or a confident outlook from Chief
Executive John Chambers could prop up shares of the world’s top
seller of routers and switches. But most analysts said concerns
over U.S. and European debt as well as the uncertain global
economy would limit any gains.

"We have pretty low expectations for Cisco," said Channing
Smith, managing director of Capital Advisors. "When a company
stubs its toes with bad quarters, investors should expect the
trend will easily take a couple more quarters to reverse."

Analysts on average expect fiscal second-quarter revenue of
around $10.23 billion, up 4 percent year-over-year but down 5
percent sequentially, according to Thomson Reuters I/B/E/S.

They also forecast third-quarter revenue to rise 5 percent
from a year earlier to $10.84 billion, with the main focus on
Chambers’ comments on the economy and technology spending.

Cisco’s global operations and a clientele spanning
businesses and government agencies has made it one of the
technology sector’s bellwethers.

The management team’s record of controlling costs and
growing the business through acquisitions also made them a
darling of tech investors over the years. But a fragile global
economy has proven more damaging than initially expected.

In the previous quarter Chambers gave a dismal outlook and
warned of a sharp fall in orders from the public sector.

"I’m just looking for stabilization, an indication from the
company that they’ve got a handle on demand, and hopefully more
positive signs from the public sector," Joel Achramowicz,
analyst at Blaylock Robert Van.