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Cisco Earnings on Cloud 9?

AP

Cisco is the juggernaut due out with earnings after the close today.

Analysts are looking for estimates of $0.35 a share. Revenue is expected to come in at $10.23 billion.

Closing Bell will have instant reaction and in-depth analysis when the numbers come out at 4PM ET.

We’ve assembled an all-star tech panel, along with our reporters on the ground.

Here’s a preview of what to look for from Cisco.

Erik Suppiger, Senior Research Analyst at Signal Hill believes Cisco is “well positioned to capitalize on consolidation trends in the cloud hosting services market and Cisco's management will be upbeat about the recent acquisition announcements.”

“Our channel checks suggest enterprise and service provider demand was healthy throughout Q2 with noted strength in the technology and wireless sectors,” said Suppiger.

Dan Morgan, Portfolio Manager at Synovus Securities Incorporated is expecting Cisco to beat consensus of $0.35 by two cents, “with most benefits coming from the lower tax rate.” Analyst channel checks indicate Cisco saw decent order growth in switching and routing markets. “This should lead allow the company to build backlog during the quarter,” said Morgan.

Morgan's firm manages $7.5 billion, also pointed out Cisco “remains well positioned in an industry poised for strong growth, driven by favorable trends in cloud computing, video/collaboration, and mobility. Exposure to the financial, manufacturing and energy sectors are areas in which Cisco appears to be finding stronger-than-expected demand.”

Cisco: Buy Rating

Suppiger reiterates a buy rating on Cisco. The company “leverages powerful competitive advantages that we believe will enable the company to maintain its dominance,” added Suppiger.

“Several market trends promise to fuel the market's growth and the company is expanding into numerous complementary growth markets. In addition, emerging geographies are rapidly adopting IP communications and Cisco is particularly well positioned to capitalize on their demand,” said Suppiger.

Catalysts

1) Web 2.0 will drive increased usage of Internet, “broadly fueling demand for network upgrades,” said Suppiger.

2) Right now emerging markets accounts for 12% of the revenue pie. Suppiger believes this will likely grow in the upcoming months.

3) Suppiger pointed out Cisco's Advanced Technology division contains a number of promising high growth products that represent compelling catalysts for growth.

Cisco & Cloud Computing

Morgan said Cisco still faces competitive hurdles for a larger piece of the corporate IT market, especially with the shift toward cloud computing, which is boosting the demand for data center systems. Cloud computing allows companies to tap computing power through a network instead of in-house data centers. Morgan believes Cisco’s growth in cloud computing is one to watch.

Risks

Cisco has such a “broad market presence”, both analysts believe the company is “highly exposed to macroeconomic trends”. Suppiger said “in spite of the company's slowdown in growth, management is investing aggressively in operations, which has put pressure on profit margins.”

Cisco's management team have been taking cost cutting measures. Suppiger said “that could be disruptive to the Company's operations and execution. The Company already has declining revenue growth, and further disruption could result in erosion in market share.”

Disclosures

Morgan: Firm owns Cisco
Suppiger: Firm owns Cisco

Closing Bell will have instant reaction and in-depth analysis when the numbers come out at 4PM ET.

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