Networking hardware provider Cisco Systems (NASDAQ:CSCO) is scheduled to report its fiscal fourth-quarter results after the market closes on Wednesday, Aug. 14. The company expects solid revenue and earnings growth, although an increasingly precarious trade environment could hurt Cisco's guidance.

What happened last time

Cisco extended its long streak of beating analyst estimates when it reported its fiscal third-quarter results in May:

Metric

Q3 2019

Change (YOY)

Compared to Average Analyst Estimate 

Revenue

$12.96 billion

4%

Beat by $70 million

Non-GAAP (adjusted) earnings per share

$0.78

18.2%

Beat by $0.01

Data source: Cisco.

Adjusted for the divestiture of the service provider video software solutions business, Cisco's revenue grew by 6% year over year in the third quarter.

All three of Cisco's main product segments reported growth in the third quarter. Infrastructure platforms revenue was up 5% year over year to $7.55 billion; Applications revenue was up 9% year over year to $1.43 billion; and security revenue was up 21% year over year to $707 million. Outside of products, services revenue grew 2% to $3.24 billion.

Cisco's per-share earnings grew much faster than net income thanks to heavy spending on share buybacks. Non-GAAP net income grew by just 8.1%, but Cisco was able to more than double that growth rate on a per-share basis. Through the first nine months of fiscal 2019, Cisco has spent more than $16 billion on share buybacks.

Cables going into networking equipment.

Image source: Getty Images.

What analysts are expecting

Cisco is expected to continue growing revenue and earnings in the fiscal fourth quarter:

Metric

Average Analyst Estimate

Growth (YOY)

Revenue

$13.39 billion

4.2%

Non-GAAP earnings per share

$0.82

17.1%

Data source: Yahoo! Finance.

Adjusted for the divestiture of the service provider video software solutions business, Cisco expects fourth-quarter revenue to grow by 4.5% to 6% year over year. Its non-GAAP earnings guidance range is $0.80 to $0.82, putting the average analyst estimate at the high end.

When Cisco reported its third-quarter results, the company was confident that tariffs on Chinese goods wouldn't have much of a direct impact on its business. Cisco CEO Chuck Robbins said during the earnings call: "We are operationally -- all that we need to do is now behind us. And we see very minimal impact at this point based on all the great work the teams have done and it is absolutely baked into our guide going forward."

Since May, the trade war between the U.S. and China has escalated. If tense trade relations lead to a slowdown in the global economy, Cisco will almost certainly feel some pain as its customers pull back or delay orders.

Cisco's transition to recurring revenue and subscriptions, and its growth in software-heavy areas like security and collaboration, should make its revenue more predictable than in the past. But the company's core business is still highly sensitive to global economic developments.

Cisco has enjoyed a period of solid growth since late 2017. How much longer it can last, given the volatile economic backdrop, remains to be seen.