Economic turmoil is plaguing almost all markets in the world, with the slight exception of tech industries.  For the past few weeks, we’ve witnessed how EMC, Fusion-io, Intel and VMware proved that being related to the information technology sector will provide another layer of protection from economic downtimes.  But, perhaps, the one that will test this idea has yet to reveal its cards. One of the largest networking companies, Cisco, will be facing an already flustered audience when they open their books to discuss the company’s 2010 fourth quarter and fiscal year 2011 financial results on August 10^th.

In general, experts are still optimistic about how Cisco performed for the last few quarters. But now, the question “should you still buy Cisco stocks?” is where we draw the line.  Read on Forbes is RBC Capital Analyst Mark Sue’s insights on this matter:

“Our view is that things are still under disarray internally as Cisco works to stem market share loss and reorganize, while laying off employees by the thousands. If anything, the demand environment may slow for Cisco following its fiscal year end.” He then touched on a more technical side saying, “At 10x our CY12 EPS of $1.65, Cisco’s valuation is un-compelling relative to large cap tech. Cisco is trying many tactical things to fix its strategic errors but it’s going to take time for the situation to recover.”

Spending cuts in networking equipment in the government has radiated onto Cisco grounds. Budget deficits, climbing debts and more bad news punish economies from all corners of the globe.  But why become frugal in IT?  Jefferies Analyst George Notter has an answer: “If you’re an IT manager and you’re looking at your capital budget and you see all this craziness going on in the world right now, are you inclined to be little bit more conservative? I think the answer has to be yes.”

This scenario leaves many thinking that this frugality will not only affect Cisco, but all others in the same line of business. With this, are we going to see Juniper Network tread the same waves? This Cisco competitor has presented convincing growth during its earnings call last July.

The battered state of Cisco was further revealed when they announced a round of 6,500 job cuts—a hands-down winner for the year’s largest downsizing award.  Even executives are not standing on a solid rock at Cisco, and could soon be sent packing at any time.  A recent report mentioned that Apple has already hired more than 20 engineers included in the laid-off list of Cisco.

An article in Reuters.com noted that Thomson Reuters I/B/E/S estimated Cisco’s earnings for the July quarter to be at $10.976 billion and $10.994 billion for the running quarter.