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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: J Fieb who wrote (28991)	5/8/2002 12:45:37 AM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

From the half-empty perspective: siliconinvestor.com QLogic Fourth-Quarter Earnings Down May 7 8:34pm ET SAN FRANCISCO (Reuters) - QLogic Corp. , which makes gear for storage area networks, on Tuesday posted a 26 percent drop in net income in its fiscal fourth quarter as corporations slashed spending on information technology, but forecast revenues would rise in the next two quarters. QLogic said it would post sequential revenue gains in its current first quarter and the following quarter as demand starts to improve. Investors drove up QLogic's stock in after hours trading. The shares, which closed on Tuesday at $38.26, down $3.74, or 8.9 percent, rose 8.6 percent to $41.55 in after-market trade. QLogic earned $18.7 million, or 20 cents per share, in the fourth quarter, ended March 31, compared with $25.2 million, or 27 cents per share, a year earlier. Excluding charges, QLogic posted pro forma earnings of $21.1 million, or 22 cents per share, compared with $26.6 million, or 28 cents per share, a year earlier. Wall Street analysts on average had expected earnings excluding charges of 20 cents per share, with estimates between 17 cents to 21 cents per share. Fourth-quarter revenues were $92.3 million, down 8 percent from record quarterly revenues of $100.5 million a year earlier, but up 10 percent from third-quarter's $83.6 million. The gain in revenue topped the forecast for 3 percent to 8 percent growth that QLogic gave in January, when it said it was "cautiously optimistic" it was past the worst of the downturn. DEMAND SEEN IMPROVING QLogic Chairman and Chief Executive H.K. Desai said the company posted higher sales of both its Fibre Channel and SCSI product lines in the past quarter. QLogic said it sees revenues up 3 percent to 8 percent in its first quarter ending in June from fourth-quarter revenues, and second-quarter revenues rising 2 percent to 6 percent from that level. The company also said it expects first-quarter pro forma earnings per share in a range of 20 cents to 24 cents, compared with fourth quarter pro forma earnings 22 cents per share. Analysts had expected QLogic would forecast improving business conditions, despite an overall downturn in information technology (IT) spending, because corporate network storage needs are growing as data flows increase. "Storage management has been a pain-point given that you have data growing at 80 percent per year," said Glen Ingalls, an analyst with SoundView Technology Group. "Deploying storage area networks allows you to manage more data." Storage products also cut costs of managing data, a key consideration for cash-strapped corporate IT departments. "Right now there is more of an emphasis on cost savings than revenue generation," Ingalls said of IT spending. PARTNERS SEEN HELPING Analysts also expect QLogic to benefit from partnerships with major networking companies, including network-management computer maker Sun Microsystems Inc. , which is deploying new products using QLogic components. QLogic is also allied with Cisco Systems Inc. , the No. 1 maker of gear for managing Internet traffic. Cisco in April said it would integrate QLogic components into systems storage networking products it is developing. "They (QLogic) have a lot of opportunities that at this point you can't put a number on," said Kevin Hunt, an analyst with investment bank Thomas Weisel Partners, which makes a market in QLogic shares. QLogic competitor Emulex Corp. in April reported both rising sequential and year-over-year revenues in its March-ended quarter as demand for storage networking products improved. "The storage market overall is pretty tough, but the network storage part of the market is growing," said J.P. Morgan analyst Bill Lewis. "More people are buying network storage because it's more cost-effective."