(RTTNews) - Networking solutions provider Brocade Communications Systems, Inc. (BRCD: News ) reported Monday a year-over-year decline in profit for the fourth quarter, hurt by drop in margins, despite a strong 31% quarterly revenue growth. Adjusted earnings, though down from last year, topped analysts' expectations by two cents. However, the company returned to a profit after reporting a loss in the previous quarter. The company also reiterated its earnings and revenue forecast for the full year 2010.

In a statement, chief executive officer, Michael Klayko said, "Fiscal 2009 was a transformational year as Brocade became one of only two end-to-end networking solutions providers in the industry. Brocade also delivered exceptionally strong year-over-year revenue growth and increased its account penetration in the Ethernet networking market while growing share in the storage networking market.

"In addition, Q4 saw tremendous momentum as we exceeded the Street's consensus non-GAAP EPS estimates for the seventeenth consecutive quarter, delivered the fastest sequential revenue growth of any large networking vendor, and generated strong cash flows," Klayko added.

The company also stated that it is now seeing some positive trends that bode well for the industry, while IT spending has been constrained in 2009. Research firm Gartner recently said that Global IT spending is expected to increase to $3.3 trillion in 2010, citing needs to address the aging infrastructure needs.

Fourth Quarter Results

The San Jose, California-based company reported net income of $33.60 million or $0.07 per share for the fourth quarter, down from $35.58 million or $0.09 per share in the prior-year quarter.

Excluding items, non-GAAP net income for the quarter declined to $73.36 million or $0.15 per share from $75.77 million or $0.20 per share in the year-ago quarter.
On average, 23 analysts polled by Thomson Reuters expected the company to earn $0.13 per share for the fourth quarter. Analysts' estimates typically exclude one-time charges and gains.

Total net revenues for the quarter surged 31% year-over-year to $521.76 million from $398.50 million in the same quarter last year, and topped analysts' consensus estimate of $521.09 million by a whisker. The growth was driven by strength in North America, Asia Pacific and Japan.

Peer Performance

Among Brocade's peers, San Jose, California-based Cisco Systems, Inc. (CSCO: News ) reported earlier in the month that its first-quarter profit fell 19% from last year, hurt by lower sales and higher provision for income taxes. Net income declined to $1.8 billion or $0.30 per share from $2.2 billion or $0.37 per share in the year-ago quarter. Quarterly net sales declined 12.7% to $9.02 billion from $10.33 billion in the same quarter last year.

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