Cisco Systems, Inc. (NASDAQ:CSCO) is scheduled to report its fiscal second quarter earnings on February 12 after the bell. The company will also hold a conference call on the same day at 4:30 PM EST. BMO Capital Markets analyst Tim Long said in a research note that the networking equipment maker’s earnings won’t be as bad as Wall Street fears.

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Cisco to beat forecasts

Cisco Systems, Inc. (NASDAQ:CSCO) has already set low expectations for the quarter ending January, 2014 mainly due to weak orders from emerging markets. Though emerging markets remained weak, BMO Capital Markets says enterprise spending in the U.S. was particularly strong and Western Europe also showed signs of improvement. So, Tim Long expects Cisco Systems to beat expectations.

BMO Capital Markets has an Outpeform rating on the stock with a $25 price target. The research firm expects the company to report $11.1 billion in Q2 revenues and $0.45 in earnings per share. Wall Street consensus forecasts $0.46 in earnings on revenues of $11 billion. Tim Long expects Cisco Systems, Inc. (NASDAQ:CSCO)’s gross margins to come at 62.5%, and operating margins of 27.3%. The research firm said revenues from its routers business are likely to decline 14% to $1.7 billion. Sales at Cisco’s switches business are expected to plunge 8% to $3.4 billion. And the company’s services business is expected to decline 3% to $2.6 billion.

Expect Cisco to announce a dividend hike

BMO Capital Markets expects Cisco Systems, Inc. (NASDAQ:CSCO) to raise the dividend from the current 17 cents to 20 cents. That would represent a healthy 3.7% yield based on its current price. For the April quarter (Q3, 2014), Tim Long expects $11.3 billion in revenues and $0.48 a share in earnings. Last month, Cisco Systems lowered its long-term growth estimates. The company now expected its business to grow at 3-6% annual rate over the next five years, down from the previous forecast of 5-7% growth. Over the past three years, Cisco’s annual growth rate has been about 2%. So, analysts say the lower end of its revised growth estimate seems reasonable.

Cisco Systems, Inc. (NASDAQ:CSCO) shares were little changed at $21.55 at 10:58 AM EST.