PREVIEW-Cisco, Juniper may trim budding tech optimism

* Results to show more stability but no strong recovery

* Analysts say visibility still poor, Europe weak

* Credit Suisse upgrades Cisco to outperform from neutral

By Ritsuko Ando

NEW YORK, July 20 (Reuters) - Strong earnings from IBM
(IBM.N) and Intel (INTC.O) may have emboldened technology
investors looking for signs of a recovery, but quarterly
results from Cisco (CSCO.O) and Juniper JNPR.O may do just
the opposite.

Analyst said the results from the network equipment makers
are likely to remind investors about the stubborn weakness in
corporate technology spending.

For that reason, many warned investors not to infer too
much from IBM's strong earnings and full-year outlook, made
possible by cost cuts and a shift to higher-margin services
rather, or from Intel's results which were bolstered by
consumer, rather than corporate, demand.

Analysts advised that investors were better off focusing on
IBM's 13 percent drop in quarterly sales, which Bernstein
Research analyst Toni Sacconaghi said may suggest "corporate IT
spending has not improved, and may not even fully be at
bottom."

Juniper Networks Inc kicks off the reporting season for
major U.S. network equipment makers on Thursday, and analysts
expect second-quarter revenue of $765 million, down 13 percent
from a year ago and barely higher than the previous quarter's
$764 million, according to Reuters Estimates.

The results from other gear makers, whose routers and
switches run networks at large firms and telecommunications
carriers, are also likely to show things may have stopped
getting worse but are not getting much better, analysts said.

"Checks suggest that equipment vendors' visibility, or the
ability to establish a forecast, remains poor, and cost cutting
continues," said Morgan Keegan analyst Simon Leopold, although
his forecast for Juniper's quarterly sales, at $771 million,
was slightly higher than Wall Street's average.

While the U.S. economy may be at or close to bottom, Europe
was still showing weakness, analysts said.

"U.S. spending trends seem to be improving
quarter-on-quarter, while Europe is deteriorating," UBS said in
a report on global technology spending.

BETTER VISIBILITY, LONG-TERM OPTIMISM

Few analysts, however, recommend selling Cisco or Juniper
shares. Some said upbeat comments about the coming quarters by
executives like Cisco Chief Executive John Chambers could
bolster investors' confidence, even if results do not.

Credit Suisse analyst Paul Silverstein on Monday raised his
rating on Cisco to "outperform" from "neutral," hiking its
share price target to $25 from $22, as he forecast greater
visibility, particularly in North America. The report helped
Cisco shares rise more than 3 percent to $21.15.

"To be clear, we are not hearing about a significant,
robust improvement; rather, our checks indicate that Cisco's
North American enterprise business has seen steady, modest
improvement throughout the quarter with Cisco gaining
incremental visibility into its business and seeing modest
improvement in order trends," Silverstein said in the report.

He said that while few believed Cisco could achieve its
long-term revenue growth target of 12 to 17 percent a year any
time soon, he thought it could eventually achieve growth of 10
to 12 percent.

Analysts on average forecast Cisco to report fiscal
fourth-quarter revenue of $8.49 billion, down 18 percent from a
year earlier but up 4 percent from the previous quarter,
according to Reuters Estimates.

Even the more cautious analysts see long-term demand for
switches and routers, and in Cisco's case a wider range of
network equipment and software products, remaining solid.

Increasing use of the Web for downloading videos, uploading
photos to share with friends, and the shift of more business
processes like accounting and sales to online systems, mean
both large companies and phone carriers will continue upgrading
their networks in the long term, they said.

Top U.S. phone companies like AT&T Inc (T.N) and Verizon
Communications Inc (VZ.N) have reined in their capital spending
so far this year, but analysts said that was likely temporary.

"Ongoing traffic growth won't allow carriers to penny-pinch
forever," said Morgan Keegan's Simon Leopold.

Analysts also say Cisco and Juniper have handled the
downturn well, controlling their operating costs while
investing in new products and acquiring small companies,
particularly compared with rivals like Alcatel-Lucent
(ALUA.PA).

Still, most expect a sharp decline in quarterly earnings.

Cisco is expected to report earnings of 28 cents a share
before items, down from 40 cents a year earlier, according to
Reuters Estimates. The average forecast for Juniper's earnings
was 18 cents per share excluding items, down from 28 cents.
(Reporting by Ritsuko Ando, editing by Matthew Lewis)