Chief Executive John Chambers is expected to reassure the market that Cisco will eventually return to its annual revenue growth target of 12 to 17 percent as increasing Internet traffic boosts sales of routers and switches, analysts said, even if it has fallen short in recent quarters.
He also is expected to highlight progress in new technologies such as Cisco's high-definition, Web-based video conferencing system called TelePresence, and its data center virtualization services.
Cisco has grown into a $40 billion business from $1 billion since Chambers took the CEO role in 1995, and analysts credit his ability to seize growth opportunities through acquisitions and development of new technologies.
"As in years past, we believe Cisco will underscore its ability to capture market transitions, while identifying and quantifying future opportunities," Lehman Brothers analyst Jeff Kvaal said in a report this week.
"Specifically, we look for management to dig deeper into its data center strategy," he said.
Cisco said in a statement earlier this week that executives would provide overviews of the company's financial "roadmap" and long-term strategy, which focuses on innovation
Data center "virtualization," or using advanced technologies to run networks and servers more efficiently, is seen as a key growth area for Cisco as large businesses, and Internet and telecommunications service providers upgrade their facilities to handle increasing Internet use.
Cisco stepped up its foray into data center virtualization by taking a small stake in VMware Inc (VMW.N: Quote, Profile, Research, Stock Buzz) in 2007. VMware's virtualization software allows one machine to do the work of multiple computers by running "virtual" servers.
The analyst meeting comes amid worries about the U.S. banking sector and fears of a prolonged economic slump, with recent data showing the U.S. jobless rate at a 5-year high.
While routers and switches are still the core of Cisco's business, Standard & Poor's analyst Ari Bensinger said that with the company already the dominant vendor in those areas, interest is shifting to other areas.
"Routing and switching... there's not much room for more market share in terms of those markets," said Bensinger. "They're basically mature."
TARGETS AND ACQUISITIONS
Goldman Sachs analyst Simona Jankowski earlier this week said the conference could provide a "positive catalyst" for the shares, which are down 28 percent from a year earlier.
On the other hand, any comment from Chambers suggesting a prolonged slowdown would come as a blow. The company has forecast 8 percent annual revenue growth in the current quarter and 8.5 percent the next. Revenue rose around 10 percent in the past two quarters.
Acquisitions have been a key part of the San Jose, California-based company's growth, including its 2006 purchase of cable set-top box maker Scentific-Atlanta and a deal last year for Web conferencing services firm WebEx.
With over $20 billion in cash and fixed income securities at the end of its last quarter ended July, analysts say it certainly has the means.
Rumored targets include VMWare and its majority owner and data storage company EMC Corp (EMC.N: Quote, Profile, Research, Stock Buzz), as well as Cisco's smaller and more specialized rivals like Brocade Communications Systems Inc (BRCD.O: Quote, Profile, Research, Stock Buzz). Cisco has declined comment on such speculation.
