Brocade Profit Rises On Better Margins, Top Estimates - Update

(RTTNews) - Data storage solutions provider Brocade Communications Inc. (BRCD), Monday reported an increase in fourth-quarter profit, helped mostly by better margins that offset a drop in revenue as storage area networking and IP networking businesses slackened. However, both earnings and revenue for the quarter topped Wall Street estimates.

Brocade shares gained over three percent in after-hours trade on the Nasdaq.

The San Jose, California-based company posted quarterly net income of $64 million or $0.14 per share, compared with $54 million or $0.11 per share in the same period last year.

Excluding items adjusted earnings for the quarter were $109 million or $0.24 per share, compared with $78 million or $0.17 per share a year ago. On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.18 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the fourth quarter slid to $559 million from $578 million last year. Analysts expected revenue of $554.50 million for the quarter.

Gross margin for the quarter expanded to 64.9 percent from 62.4 percent last year.

Storage Area Networking (SAN) business revenue slid 4 percent year-over-year, due to continued soft demand in the overall storage market.

IP Networking business revenue was down 3 percent year-over-year, with Ethernet switch revenue down 8 percent.

Brocade stock ended regular trade at $8.10, up $0.01 or 0.06%, on a volume of 7 million shares. In after hours, the stock gained $0.31 or 3.89% at $8.41.