Brocade Communications Systems Earnings: Here’s Why the Stock is Down Now

Brocade Communications Systems, Inc. (NASDAQ:BRCD) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1%.

Brocade Communications Systems, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $0.21 in the quarter versus EPS of $0.20 in the year-earlier quarter.

Revenue: Rose 5.01% to $588.73 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Brocade Communications Systems, Inc. reported adjusted EPS income of $0.21 per share. By that measure, the company beat the mean analyst estimate of $0.16. It beat the average revenue estimate of $575.62 million.

Quoting Management: “Brocade achieved record revenue in Q1 based on strong performances in both our storage and IP networking businesses,” said Lloyd Carney, CEO of Brocade. “As the new CEO, it is my top priority to ensure that the company continues to execute well in our core businesses to drive growth and shareholder value. Looking forward, I see new opportunities emerging in the networking industry due to disruptive IT market trends that are challenging the capabilities of today’s networks. It is clear that customers are looking for new technologies and approaches in networking to meet these challenges. I am excited and honored to navigate the company forward, delivering on these customer requirements in a way that drives top-line revenue through both innovation and operational efficiency.”

Key Stats (on next page)…

Revenue increased 1.79% from $578.36 million in the previous quarter. EPS increased 23.53% from $0.17 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.14 to a profit $0.15. For the current year, the average estimate has moved up from a profit of $0.61 to a profit of $0.63 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)