Networking solutions provider Brocade Communications Systems, Inc. (BRCD) reported Thursday a profit for the second quarter that increased from last year, reflecting improved margins, despite a 1 percent revenue drop. Both adjusted earnings per share and quarterly revenues topped analysts' expectations.
"We ended the quarter with revenue of $543 million, which came in at the high-end of our guidance, and exceeded our expectations for non-GAAP EPS, which was up 24% year-over-year. Our focus remains on driving profitability in the near-term as we invest in the business and position Brocade for long-term success," CEO Michael Klayko said in a statement.
The San Jose, California-based maker of switches and software for data-storage networks reported net income of $39.30 million or $0.08 per share for the second quarter, higher than $26.08 million or $0.05 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter increased to $72.22 million or $0.15 per share from $61.27 million or $0.12 per share in the year-ago quarter.
On average, 28 analysts polled by Thomson Reuters expected the company to earn $0.12 per share for the second quarter. Analysts' estimates typically exclude one-time charges and gains.
Total net revenues for the quarter edged down 1 percent to $543.44 million from $548.36 million in the same quarter last year, and topped Twenty seven analysts' consensus estimate of $541.37 million by a whisker.
Storage business revenue, including products and services, grew 3 percent to $400.1 million, while Ethernet business revenue, including products and services, declined 10 percent to $143.4 million from last year.
As a percentage of total revenues, OEM revenues for the quarter were 70 percent, while Channel/Direct revenues were 30 percent. Domestic revenues were 65 percent, while international revenues were 35 percent.
Operating margin for the quarter expanded 110 basis points to 9.5 percent from last year's 8.4 percent as gross margin improved 210 basis points, partially offset by higher operating expenses.
The company's board also recently approved an increase of $500 million to the authorized stock repurchase program which brings the remaining balance to about $624 million as of Wednesday.
"We will continue to drive innovation, leverage our investments and maintain spending discipline through the remainder of fiscal year 2012. We are committed to growing revenues with the goal of increasing profits faster than revenue this year and to driving shareholder value by continuing to execute our strategy," Klayko added.
BRCD closed Thursday's regular trading session at $4.94, up $0.04 or 0.82% on a volume of 11.11 million shares.
For comments and feedback: editorial@rttnews.com