UPDATE 1-JP Morgan cuts rev view for Cisco; downgrades rivals

lunedì 7 aprile 2008 17:39

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April 7 (Reuters) - J.P. Morgan Securities cut its revenue growth estimates for network equipment giant Cisco Systems Inc (CSCO.O: Quotazione) and downgraded rivals Aruba Networks and ShoreTel, citing slowing technology spending due to a prolonged slowdown in the U.S. economy.

The brokerage expects Cisco's revenue to grow at 10 percent in fiscal 2009, compared with its previous forecast of 15 percent.

JP Morgan said an extended slowdown in the U.S. economy is leading to lower technology spend as companies find ways to cut costs. Deal sizes are expected to be downsized, it added.

The brokerage has a "neutral" rating on Cisco's stock, which was down more than a percent at $24.05 in morning trade on Nasdaq.

The brokerage downgraded ShoreTel Inc (SHOR.O: Quotazione), which provides business phone systems carried over the Internet, to "underweight" from "overweight."

Analyst Ehud Gelblum said he expects the weak North American economic environment to crimp IP telephony spending by businesses through 2008 and into 2009.

"We see a strong potential for further earnings disappointments and few chances for positive catalysts over the coming quarters," he said.

Downgrading Aruba Networks Inc ARUN.O to "underweight" from "neutral," Gelblum said extending sales cycles and shrinking order sizes could continue to plague Aruba throughout 2008 -- especially in the retailing vertical.   Continua...