Cisco Earnings On Deck, To Trump FOMC Impact (CSCO)

We may have an FOMC decision on interest rates due at 2:15 PM EST today, but technology stock traders may actually care more about what John Chambers of Cisco Systems Inc. (NASDAQ: CSCO) has to say about the technology spending environment and enterprise trends into the rest of 2008 over what Ben Bernanke says.

The networking giant reports after today’s close.  First Call estimatesare $0.39 EPS on $10.31 Billion in revenues.  For next quarter,estimates are $0.40 EPS and $10.39 Billion in revenues.  This alsomarks the end of the fiscal year in this report, so if the companygives some longer-term guidance for Fiscal July-2008 First Call hasestimates pegged at $1.69 EPS on $43.71 Billion in revenues.  Thesenumbers are the same as yesterday.

Traders will hang on every word from Chambers in the conference callregarding what he opines about the outlook for enterprise spending.They will also be looking to see if he sounds a tad more positive or alittle more wishy-washy than in his last earnings conference call.There have been some Cisco executives noting (in June and July) someimprovements starting to be seen for later in the year, but a skepticalWall Street has seen technology make those comments only to see themfade away more times than can be counted.

Here are several key individual metrics to consider before the report:

• The 52-week trading range is $20.56 to $34.24, and today’s pivot price we are using is $22.17 mid-day.
• Analysts still have an average target north of $29.00. 
• Shares have recovered 8% from recent lows, they have tried to signal abottom in mid-July. We’ll be watching key moving averages as the 50-Daymoving average is $23.84 and the more critical 200-Day moving averageis $25.71. 
• Options traders appear to be braced for a move of about $1.05 to $1.15 in either direction.

Jon C. Ogg
August 5, 2008