Cisco's Head Cold Isn't A Tech Plague

Not all bellweathers are created equal. True, Cisco (Nasdaq:CSCO) is an incredibly significant player in networking equipment and software, but the product and customer overlaps are never perfect across any sector. What that means for investors is that Cisco's near-term business issues may not be a sign of doom for the sector, and nimble investors may want to keep an eye out for stocks that get cut down unnecessarily. 

Cisco's Bad News
Cisco reported decent fiscal first quarter results (sales up more than 19%; operating income up 14%) but guidance was very problematic. It looks like Cisco is seeing low-to-mid single-digit growth in its second quarter (the calendar fourth quarter) and may post less than double-digit growth for the full fiscal year. Perhaps not too surprising, the biggest sources of weakness for Cisco are public (government) customers and European customers - two market segments where debt burdens and weak spending budgets are major issues. In fact, state governments' orders plunged 48% on a quarter-over-quarter basis.

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