) were trading down, Salomon Smith Barney maintained its buy investment rating on shares of the networking giant.
Analyst Alex Henderson explained Cisco was under pressure due to pessimistic comments from PMC-Sierra Inc. (PMCS
). Cisco is the largest buyer of PMC-Sierra chips, which accounts for 25% to 30% of its revenues.
Henderson said while the slowing economy is impacting demand, he believes Cisco aggressively will cut costs to deal with the tough environment. Cisco, he added, will use its substantial backlog to meet estimates until the third and fourth quarters, when it faces more conservative revenue growth expectations.
Shares of Cisco were trading down 2-5/16 at 37.