Could not happen to a nicer guy! ;) I wonder if this means Qlogic is taking market share from BRCD, or if the whole market for SAN hardware is down. If the latter, Qlgc will pre-announce also at some point. I suspect the former. HK Dessai doesn't miss. Here is a report:
SAN JOSE, Calif. -- Brocade Communications Systems Inc. (BRCD) reversed a
year-earlier net loss in the fiscal fourth quarter caused by a variety of
charges. The company also said it has cut 12% of its work force and that sales
should fall sharply in the first quarter.
For the quarter ended Oct. 26, the networking-storage provider late Thursday
reported net income of $15.8 million, or seven cents a share, compared with a
year-earlier net loss of $53.7 million, or 24 cents a share.
The latest quarter's results include a $7.1 million investment gain, while the
year-ago figure includes $57.6 million in charges and a $19.5 million investment
loss. Excluding those items, year-earlier earnings would have been five cents a
share.
Revenue jumped 31% to $153.1 million from $116.5 million.
Brocade warned last month it expected earnings of seven cents a share on
revenue of $152 million to $153 million. The company's August forecast was for
fourth-quarter earnings of 10 cents a share on sales of $160 million to $165
million. The firm blamed the warning on weakness in information-technology
spending.
Meanwhile, Brocade said the layoffs and other planned restructuring moves will
cut costs by more than $8 million in the fiscal first quarter. The company now
has about 1,200 employees.
For all of fiscal 2002, the firm had net income of $59.7 million, or 25 cents
a share, compared with $2.8 million, or a penny a share, a year earlier. Revenue
increased 9.6% to $562.4 million from $513 million. Excluding the year-earlier
third-quarter items, fiscal 2001 earnings would have been 28 cents a share.
Going forward, Brocade is projecting fiscal first-quarter sales of $120
million to $125 million on "supply-chain contraction" while breaking even on a
per-share basis excluding items. Company officials said during a later
conference call they are seeing IT spending patterns similar to a year ago, but
that Chief Executive Greg Reyes doesn't expect the revenue weakness to last
beyond the first quarter.
"To the extent that the IT environment doesn't deteriorate, we expect this to
be a one-quarter phenomena," he added.
Analysts on the conference call pressed Brocade management to detail exactly
why sales would fall in the first quarter. "Bottom line is that we are just
generally concerned about a lack of seasonality in this fall period and with our
January quarter," said Mr. Reyes. "... We're being thoughtful about the fact
there may be a contraction in the supply chain to the end user."
Chief Financial Officer Tony Canova added the company was being "highly
conservative" with its first-quarter forecast. Brocade didn't provide additional
guidance, but Mr. Reyes said he is convinced the firm isn't losing market share
despite the expected drop in revenue.
Meanwhile, Chief Operating Officer Michael Byrd, who spoke very briefly on the
conference call, said he will be stepping down at the end of the fiscal first
quarter to spend more time with his family.
At 4 p.m. EST on the Nasdaq Stock Market, shares of Brocade were up 89 cents,
or 14%, at $7.28. In after-hours activity, the stock fell to $6.06, according to
Island ECN.
-Kevin Kingsbury; Dow Jones Newswires; 609-520-4367 and Johnathan Burns; Dow |
