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Spending Haunts Cisco's Q1

UBS cuts estimates for Cisco, citing increased competition and a decline in enterprise spending

Will it be tough sledding for Cisco Systems Inc. (Nasdaq: CSCO) in 2005?

Thanks to increase competition and price pressure in some markets, Cisco may have to innovate in a hurry, according to analysts at UBS AG, who lowered their estimates for Cisco this week. Cisco's current quarter ends on Saturday, and the company will announce its results on Tuesday, November 9.

The research firm reduced its fiscal first-quarter 2005 sales estimates for Cisco to $5.93 billion (from $5.99 billion) and its fiscal year 2005 estimates to $24.67 billion (from $25 billion).

The analysts, Nikos Theodosopoulos and Saud Masud, also lowered their earnings per share estimate for fiscal year 2005 to $0.85 from $0.87. The analysts backed up their move by citing the following factors:

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