Cisco Systems, Inc. (NASDAQ: CSCO) is the most important earnings report of the week to technology investors. The report is expected after the close of trading on Wednesday. While Cisco’s broader turnaround remains a key focus, China and the Asia-Pacific business is likely to also be in focus.

UPDATED FOR EARNINGS: Cisco earnings beat expectations, but margin contraction remains a concern.

Our take is that Cisco has to do better than just meet earnings estimates and offer guidance that meets forward estimates. The reason is that shares were at $22.64 before the last report and immediately jumped to $24.00 after the report. They traded to just above $26 in July and are above $25 ahead of the report.

Thomson Reuters has Cisco’s consensus estimates as $0.53 in earnings per share and $12.14 billion in revenues. Keep in mind that this would be only a one-penny gain in earnings per share and would represent a 2.2% drop in revenues from the same quarter last year. With last quarter’s earnings report and conference call, Cisco offered up positive guidance for revenues to be lower by 1% to 3%.

As far as what to expect one quarter out, the consensus estimates for the coming quarter are $0.53 in earnings per share and $12.08 billion in revenues. That represents a report that would be nearly identical to last year on both earnings and revenues.

Analysts have been chasing Cisco’s price targets and ratings higher of late. The new consensus price target is up at $26.03, a tad higher than the estimates of last week.

We will be paying close attention to Cisco’s cash balance and stock buybacks. Last quarter, it repurchased some 90 million shares of common stock. Cisco also ended the last quarter with some $50.5 billion in cash and cash equivalents.

Another key issue to watch on Wednesday afternoon will be Cisco’s gross margin. Last quarter, this shrank to 60.7% from 61.5%.

The stock chart is at an interesting juncture, hugging on to the 50-day moving average as support. The stock price was at $25.09 in mid-day trading and the 50-day moving average is $25.07. In case Cisco rallies, there were seven or eight attempts to break above $26 on the chart in July, so $26 has been key resistance. If there are any surprising disasters, Cisco’s lowest level since the last report was around $24.00, and the 200-day moving average is all the way down at $22.81.

Options trading for the weeks before the August expiration month have been dominated by call option volume ahead of the earnings report. That is true on the pre-earnings volume and on the open interest. Translation — there are almost certainly more Cisco bulls when it comes to earnings speculators.

Another issue to consider is Cisco’s short interest. This was back up to 72.1 million shares as of the July 31 settlement date. While that is not the highest reading over the last year, the short interest rose four reports in a row and is well above the average over the last year.

Finally, the rest of the world. Clearly, the geopolitical news is not working in the favor of U.S. technology giants. As the NSA and spying news just refuse to die, we have fresh news of more accusations of spying in China. This almost certainly means that John Chambers and his team have no hope of China looking great in this last quarter nor in the immediate quarters ahead. Then there is Russia, where the United States is now in a sanction war with Vladimir Putin — that can’t be great for Cisco. Neither is a weakening Germany.

At $25.10 ahead of earnings, Cisco shares have a 52-week range of $20.22 to $26.48. The networking and communications equipment giant is valued at almost 17 times trailing earnings, but only at about 11.5 times expected next year earnings.

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