NEW YORK (CNNMoney.com) - A rebound in corporate spending and a big acquisition should translate into a strong third quarter for Cisco, analysts and investors say.

Cisco (Research), the biggest manufacturer of Internet gear and a closely watched bellwether of the tech sector, reports its fiscal third quarter earnings after the closing bell Tuesday. Analysts are forecasting double-digit sales growth, with revenue expected to come in at $7.16 billion, a 14 percent increase from the year-earlier quarter, according to a Thomson FirstCall survey of analysts.

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Analysts are also expecting a higher profit excluding expenses, with earnings per share expected to be 23 cents, including a charge for stock options expensing, according to Briefing.com. Cisco posted earnings per share of 23 cents in the prior year quarter, but the company did not include stock options expenses that quarter.

Cisco's shares had been stuck in a rut since late 2004 while the stocks of other equipment makers rallied.

But this year is a different story. The stock is on a tear, appreciating 27 percent so far this year.

Analysts say the company is benefiting from a "refresh cycle" because corporations are upgrading their networks and buying new switches. Routers and switches accounted for a combined $4 billion, or 62 percent of Cisco's total sales, last quarter.

At the same time, the company, which thrived during the Internet boom of the late 1990s, faces slowing growth over the long term in its core businesses, which are maturing.

This question has led some analysts to question whether Cisco can maintain double-digit percentage growth going forward. Router sales increased just seven percent from a year ago in Cisco's most recent quarter while sales of switches grew about 12 percent.

John Slack, an equity analyst at Morningstar, said he's expecting an in-line quarter and a strong forecast for the current quarter, and his forecast for the rest of the year is optimistic.

"Revenue growth is going to pick up in the second half of this year," said Slack. "We're seeing a move by a lot of enterprises to re-invest in new switches."

Slack said orders for Cisco's equipment have been strong for several quarters now, but it has taken awhile for the company to realize growth on those orders because the sales cycle is slow for some customers.

But investors and analysts say the white-hot consumer market will prove to be a faster-growing segment for Cisco than routers and switches, and will boost its top line. These people say Cisco is well-positioned to benefit from hot new businesses such as video over the Internet and broadband phone access.

To that end, analysts and investors will also pay close attention to how the $6.9 billion acquisition of cable set-top box maker Scientific-Atlanta, completed earlier this year, will affect Cisco's numbers going forward. For this quarter, the company is expected to provide two sets of numbers – one that includes Scientific-Atlanta's contribution to revenue and one that does not.

Cisco has invested heavily in what it calls advanced technologies -- areas such as its Linksys home networking division, digital video, security and wireless technology. Rich Crable, an analyst with Loomis Sayles, thinks the company's advanced technology businesses should drive double-digit revenue growth in excess of 20 percent. Loomis Sayles owns about 20 million shares of Cisco in its portfolios.

RBC Capital markets analyst Mark Sue also thinks Cisco could get a boost in the second half of the year. But he thinks the growth will come from Cisco's domestic and international telecom customers such as AT&T, BT, Telstra and Swisscom. Those companies will start spending more on building up their networks for providing "triple play" packages - comprised of phone, digital TV and broadband Internet - as well as Internet protocol television, or IPTV, a way of transmitting television over high-speed Internet connections, as opposed to traditional methods such as cable or satellite.

Telecoms will have to upgrade their existing networks, which were built for voice data, to handle video and related services. Those networks could all be built with Cisco products.

The company also stands to gain from similar offerings from cable companies. The purchase of Scientific-Atlanta catapults Cisco into the forefront of the consumer electronics area and gives it a prominent space in consumers' living rooms.

Cisco unveiled its vision for growth at a recent trade show for the cable industry, calling its consumer push "The Connected Life" - what the company bills as its plan to help cable and telco operators meet consumers' demand for voice, video and music on numerous devices. That includes TVs, PCs, cell phones and other mobile gearde.

"The acquisition of Scientific-Atlanta allows them to offer a lot more to the cable and telecom area when it comes to upgrading their networks to offer data voice and video," said Joel Binder, chief investment officer with Old Second Wealth Management.

"With the beginnings of all this talk about IPTV, that growth rate ends up being more of a driver than people had thought" for Cisco's overall growth, said Crable of Loomis Sayles. "The timing of the Scientific-Atlanta acquisition was done for a reason, and it gives them a leg up in a market that seems to be embracing IP technologies at an accelerating pace."

Crable said he thinks these businesses can help Cisco boost revenue growth from the nine percent the company reported in its fiscal second quarter to 13 or 14 percent for the next couple of quarters.

That's better than Cisco's own forecast of 10 to 12 percent revenue growth from the prior-year quarter.

Cisco closed Friday at $21.75. The stock currently trades at about 21 times expected 2006 fiscal year earnings.

Morningstar's Slack does not own shares of Cisco, and his firm does not do investment banking. Sue does not own shares of Cisco, but his firm makes a market in the securities.

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