Brocade Communications Systems Inc. Earnings Cheat Sheet: Reversing to a Loss Following Two Consecutive Quarters of Profit

Brocade Communications Systems Inc. (NASDAQ:BRCD) dropped to a fourth quarter loss, but results topped expectations. Brocade Communications Systems is a supplier of networking equipment, including end-to-end Internet Protocol based Ethernet networking solutions and storage area networking solutions for service providers such as telecommunication firms and cable operators.

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Brocade Communications Systems Earnings Cheat Sheet for the Fourth Quarter

Results: Reported a loss of $4.3 million (one cent per diluted share) in the quarter. Brocade Communications Systems Inc. had a net income of $22.2 million or 5 cents per share in the year earlier quarter.

Revenue: Rose slightly to $550.5 million.

Actual vs. Wall St. Expectations: BRCD reported adjusted net income of 16 cents per share. By that measure, the company beat the mean estimate of 6 cents per share. It beat the average revenue estimate of $527.1 million.

Quoting Management: “Brocade achieved outstanding results in Q4 that were led by record revenues for our Ethernet business, fast adoption of our 16 Gbps Fibre Channel products, improvements in profitability, and a record cash flow quarter from operations,” said Michael Klayko, CEO of Brocade. “These strong performances demonstrate that we are executing well on our long-term strategy. Looking at FY 12, we plan to leverage this momentum along with our highly differentiated innovation strategy, expanding product portfolio, and our strong routes to market.”

Key Stats:

The company’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $1.9 million in the third quarter, a profit of $27.6 million in the second quarter and $27.2 million in the first.

The company beat estimates last quarter after being in line with expectations in the third quarter with net income of 5 cents per share.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 8 cents. The average estimate for the fiscal year is 29 cents per share, down from 30 cents ninety days ago.

Competitors to Watch: EMC Corporation (NYSE:EMC), Emulex Corporation (NYSE:ELX), NetApp Inc. (NASDAQ:NTAP), Hewlett-Packard Company (NYSE:HPQ), Cisco Systems, Inc. (NASDAQ:CSCO), Western Digital Corp. (NYSE:WDC), QLogic Corporation (NASDAQ:QLGC), Dot Hill Systems Corp. (NASDAQ:HILL), Overland Storage, Inc. (NASDAQ:OVRL), and Quantum Corporation (NYSE:QTM).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)