Brocade: Fiscal 2Q11 Financial Results

(in US$ millions)	2Q10	2Q11	6 mo. 10	6 mo. 11
Revenues	501.0	549.9	1,041	1,096
*Growth*		10%		5%
Net income (loss)	22.4	27.6	73.5	54.8

Brocade Communications Systems reported financial results for its second fiscal quarter ended April 30, 2011.

Brocade recorded quarterly revenues of $550 million, representing an increase of 9.8% year-over-year and resulting in diluted earnings per share (EPS) of $0.06 on a GAAP basis and $0.13 on a non-GAAP basis.

In the quarter, Brocade saw product revenue growth of 17% year-over-year in its storage networking business driven by strong revenues across the product portfolio that included over 20% growth for both backbone/director and Server product revenues. Brocade also saw its Enterprise and Service Provider Ethernet businesses revenue grow 24% year-over-year led by its EMEA, Americas and Asia Pacific geographies. Overall Ethernet business revenue was up 1% year-over-year as lower Federal Ethernet revenue offset the growth in Enterprise and Service Provider businesses. Brocade exceeded its expectations for non-GAAP EPS and non-GAAP operating margin in the quarter.

"Brocade executed well in Q2 delivering nearly 10 percent growth year-over-year in revenue driven by strong performances in our Ethernet business among enterprises and service providers and stronger-than-expected performance in our SAN business," said Michael Klayko, CEO of Brocade. "We are excited about our opportunities going forward as there is no doubt that the networking industry is in the beginning stages of a new innovation cycle driven by the IT imperatives of virtualization and cloud computing. We believe that Brocade has established a clear leadership position by out-innovating the rest of the industry and delivering purpose-built solutions to customers well-ahead of the competition."

To read the earnings call transcript