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Brocade Communications Posts Q1 Loss - Update

2/14/2013 6:34 PM ET

Brocade Communications Systems Inc. (BRCD: Quote) Thursday reported a swing to loss in the first quarter from a profit last year, hurt mainly by a hefty tax charge. Excluding one-time charges, adjusted earnings for the quarter improved, as revenues and margins increased. Both earnings and revenues for the quarter came in ahead of analysts' estimates.

San Jose, California-based Brocade reported a first quarter loss of $21.26 million or $0.05 per share, compared to a profit of $58.58 million or $0.12 per share last year.

The first-quarter results include a non-cash tax charge of $78.2 million or $0.17 per share, due to a tax change in California which also reduced deferred tax assets.

Excluding one-time items, adjusted earnings for the quarter improved to $0.21 per share from $0.20 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Brocade engages in the supply of Internet protocol based Ethernet networking solutions and storage area networking solutions. Brocade's first-quarter revenues grew 5 percent to $588.7 million from $560.6 million last year. Twenty four analysts had a consensus revenue estimate of $575.62 million for the quarter.

Storage Area Networking business revenues were up 3 percent year-over-year, while IP Networking business revenues rose 11 percent.

Gross margin improved to 63.5 percent form 61.5 percent last year. Operating margin rose to 15.8 percent from 12.4 percent last year.

BRCD closed Thursday's trading at $6.00, up $0.24 or 4.17%, on the Nasdaq. In after hours, the stock slipped $0.12 or 2.00%.

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by RTT Staff Writer

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