If guidance and outlook have been the Achilles' heels of so many great-earnings-reports-gone-bad this earnings season, then the grand-daddy of them all could come at the close Wednesday when Cisco Systems reports its earnings.
But here's the thing: with a pessimistic tone already wafting through the Silicon Valley, if Cisco isn't as cautious with its future as some experts are projecting, the stock could actually see a relief rally of sorts.
Let's dig in a little deeper. Analysts are expecting 38 cents in earnings per share on $9.8 billion in revenue. Just about everyone I'm talking to expects Cisco to meet those expectations. But it's the guidance that will grab the headlines.
There have been so many negative reports lately about growth, cap-ex spending by some big companies, a slowdown in commercial spending that many analysts are anticipating a cautious outlook at best. CEO John Chambers has used the word "lumpy" a lot and we may hear that characterization again. Today's surprisingly weak ISM numberisn't helping the company's cause, either.
The silver lining might come with what the company sees from overseas customers. International business has been Cisco's saving grace before, but it's not clear business there will be enough to offset the perceived slowdown of business here.
And shareholders are reflecting that concern, driving Cisco shares down by 23 percent last quarter. Worse, Cisco shares now sit at a 52 week low, despite an ambitious stock repurchase plan that included a $10 billion boost on the quarter, and totaling $62 billion since the buyback program began in 2001. And of course the idea that a global infrastructure build-out bodes well for tech companies like IBM, Intel,Microsoft, but maybe mostly Cisco.