Brocade Communications Systems, Inc. Earnings: Falling Revenue Breaks Streak of Four Consecutive Increases, Profit Drops

Brocade Communications Systems, Inc. (NASDAQ:BRCD) posted lower net income in the third quarter compared with a year-earlier period. The Company is a supplier of networking equipment, including end-to-end Internet Protocol based Ethernet networking solutions and storage area networking solutions for and service providers such as telecommunication firms, cable operators.

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Brocade Communications Systems Earnings Cheat Sheet for the Third Quarter

Results: Net income for Brocade Communications Systems, Inc. fell to $1.9 million (0 cents per share) vs. $22 million (5 cents per share) a year earlier. This is a decline of 91.2% from the year earlier quarter.

Revenue: Fell 0.3% to $502.9 million from the year earlier quarter.

Actual vs. Wall St. Expectations: BRCD reported adjusted net income of 9 cents per share. By that measure, the company beat the mean estimate of 5 cents per share. Analysts were expecting revenue of $502.7 million.

Quoting Management: “Headwinds in the IT market, federal spending, and overall global economy made for a challenging quarter for the Company,” said Michael Klayko, CEO of Brocade.”While we are doing well in areas such as our Ethernet business including the adoption and deployment of Ethernet fabric solutions, we recognize that there are opportunities to optimize and improve our business.We have already taken, and will continue to take, important steps to generate growth, improve our profitability and make ourselves more efficient.Our goal is to ensure that our resources and priorities are well-aligned with our go-forward strategies for long-term success in the networking industry.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the second quarter, which saw revenue rise 9.8%.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 3 cents in the second quarter and by 6 cents in the first quarter.

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).

Investing Insights: Steve Jobs Prepares to Deliver a New Catalyst for Apple’s Stock.

(Source: Xignite Financials)