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Technology Stocks : Brocade Communications Systems,Inc. (Nasdaq-BRCD) -- Ignore unavailable to you. Want to Upgrade?

To: Jack Hartmann who wrote (543)	12/3/2000 12:11:35 AM
From: Jack Hartmann	Read Replies (2) \| Respond to of 1583

Brocade Tightens Its SAN Grip by Kenneth A. Toudouze, CFA 2:31:00 PM November 30, 2000 GMT Network storage provider Brocade [BRCD: Nasdaq] reported 4Q earnings and revenues ahead of expectations Wednesday night. In what is becoming a quarterly event, the company topped all forecasts and raised its expectations going forward. It continues to exert a Cisco-like grip on the emerging storage area network (SAN) market, and we consider it a core technology holding. Brocade reported revenues of $132m, up 43% quarter over quarter and $11m ahead of consensus expectation. Earnings per share (EPS) were reported at $0.22, a few pennies ahead of forecasts. In addition, the company announced a two-for-one stock split, effective Dec. 22 to shareholders of record on Dec. 11. Brocade increased its SAN market share to 59% from 54% in 3Q. It also commands more than than 90% of the fibre channel fabric switch market. The company added three new original equipment manufacturer (OEM) partners, bringing the total to 20, and reported that channel partners represented 25% of 4Q revenue. This revenue stream carries higher margins, pushing gross margins to nearly 60%. Operating income as a percentage of revenues moved to 26.6% from 26.1% in 3Q, and this was the sixth consecutive quarter in which operating income rose as a percentage of revenues. Brocade's cash balance is $155m, up $25m from 3Q, and days sales outstanding (DSOs) were reported at 50 days, down three days from 3Q and at the lower end of management's 50-60 day quidance. Inventories continued to be negligible, at two days sales, as coordination with its contract manufacturers continues to go smoothly. Management remains positive about future of the market, and visibility into its customer base and the SAN market continues to expand. Recognizing that SANs are in their earliest implementation stage, it would appear Brocade should continue rapid growth in the marketplace. ideaadvisor.com Good short summary. jack