Q. I have owned Cisco Systems Inc. for four years in my 401,000 retirement plan. It has had its ups and downs. Will this turn out to be a good year for the company after all? - CG, via the Internet

A. Shares of the world's largest networking supplier have been boosted by the prospects of its new products, services and regions. The firm spent several years streamlining operations and improving inventory controls, while spending generously on research and development.

But the stock recently took a hit on concern about continued weak demand from banks, retailers and carmakers for its routers and switches that direct traffic over the Internet.

Earnings rose 37 percent in its recent quarter on a 17 percent increase in revenue. But CEO John Chambers said the US enterprise market may remain "lumpy" for a while, and he didn't raise his previous revenue forecasts.

Cisco Systems stock (CSCO) is up five percent for the year following last year's 60 percent gain. It has said it plans to start paying dividends but is not saying when.

It is looking to emerging markets to help fuel future growth.

For example, it will double its investment in manufacturing and venture capital in China to $16 billion over the next five years, working with Alibaba Group, China's largest online company. It also expects to expand its hiring in India, where it is in the process of investing $1.1 billion.

The consensus rating on Cisco shares is currently a "buy," according to Thomson Financial, consisting of six "strong buys," 17 "buys," 10 "holds" and one "underperform."

This cash-rich company spent $3 billion on share repurchases in the past quarter, and its board has authorised as much as $10 billion in additional repurchases. It is also expected to spend freely on acquisitions.

For the 124th acquisition in its history, Cisco is buying privately held Navini Networks Inc. for $330 million to help it build high-speed Internet networks in emerging markets employing the WiMax wireless network technology.

Despite its networking industry dominance, Cisco faces growing competition in many product areas.

For example, its CRS-1 core router has been gaining market share, but rival Juniper Networks Inc. reportedly is preparing to announce a new core router product.

Cisco earnings are expected to rise 17 percent in its fiscal year that ends in July and increase another 17 percent the following fiscal year.

The five-year annualised growth rate is projected to be 14 percent versus the 15 percent forecast for the networking and communication device industry.