Brocade 2Q profit up 20 pct., sales disappoint
Brocade Communications Systems Inc., a maker of computer networking technology, said Thursday that fiscal second-quarter sales fell because of a slowdown in the storage market.
Still, the company increased its profit in what it termed a "challenging" market, helped by a tax benefit. Net income rose 20 percent, to $47 million, or 10 cents per share, in the February-April quarter, from $39.3 million, or 8 cents per share the year before. Excluding one-time items, profit came to 17 cents per share, which beat analysts' estimate of 15 cents per share, according to FactSet.
Weaker demand for storage products led to lower revenue from Brocade customers, who are manufacturers in the storage networking sector. Demand was better for other kinds of networking products. Overall revenue fell less than 1 percent, to $538.8 million. Analysts expected sales to grow, to $549.5 million.
Investors have worried about weaker technology spending by corporations and government agencies after other companies that make computer networking gear posted disappointing financial results last month. But Cisco Systems Inc., the industry leader, said on Wednesday that it was seeing "good signs" in the U.S. and overseas.
Brocade shares fell 20 cents, or 3.5 percent, to $5.54 in after-hours trading. The stock has gained 17 percent over the past 12 months.