Brocade: Fiscal 2Q13 Preliminary Financial Results

Brocade Communications Systems Inc. announced preliminary financial results for its second fiscal quarter ended April 27, 2013.

Brocade anticipates that it will generate revenue in the range of $536 million to $541 million and expects diluted earnings per share (EPS) of $0.15 to $0.16 on a non-GAAP basis for Q2 2013.

The company’s previous guidance for the second quarter was $555 million to $575 million for revenue and $0.14 to $0.16 for non-GAAP EPS.

Brocade anticipates that it will report Q2 2013 SAN business revenue, including product and services, between $373 million to $376 million, which is down approximately 6% to 7% year-over-year and down approximately 10% to 11% quarter-over-quarter. SAN product revenue is typically down 5% to 8% sequentially in the company’s second fiscal quarter, but the lower-than-expected SAN revenue was due to storage demand softness in the overall market which impacted the company’s revenue from some of its OEM partners.

Brocade anticipates that it will report Q2 2013 IP Networking business revenue, including product and services, between $163 million to $165 million, which is an increase of approximately 14% to 15% year-over-year and down approximately 4% to 5% quarter-over-quarter. The year-over-year revenue growth was driven in part by the updated Brocade campus LAN portfolio, higher VDX and Ethernet fabric sales, as well as improvements in sales execution.

"In Q2, we saw lower-than-expected revenue in SAN due to softness in the overall storage market. However, customers continued to increase their purchases of our Gen 5 FC SAN portfolio and we made good progress on our IP Networking growth initiatives including solid growth in Ethernet fabrics during the quarter," said Lloyd Carney, CEO of Brocade. "We believe that by leading the FC industry with innovative technology and solutions that are relevant to the problems that customers face today, Brocade continues to be well-positioned for long-term success in the data center. We will provide more details on our second quarter results at our earnings call on May 16."