Brocade Communications Systems Earnings: Here’s Why Investors are Not Happy Now

Brocade Communications Systems, Inc. (NASDAQ:BRCD) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 4.7%.

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Brocade Communications Systems, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 13.33% to $0.17 in the quarter versus EPS of $0.15 in the year-earlier quarter.

Revenue: Decreased 0.86% to $538.78 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Brocade Communications Systems, Inc. reported adjusted EPS income of $0.17 per share. By that measure, the company beat the mean analyst estimate of $0.15. It missed the average revenue estimate of $544.24 million.

Quoting Management: “Our storage area networking revenues did not meet our original expectations for Q2 due to short-term slowing in the storage market and execution challenges at certain of our large OEM partners. I believe the longer-term market opportunity for our SAN products continues to be favorable, supported by the fact that our Gen 5 (16 Gbps) Fibre Channel products exceeded 50% of our shipments of directors and switches in the quarter,” said Lloyd Carney, CEO of Brocade. “Also in Q2, Brocade experienced strong year-over-year growth of our IP networking product sales highlighted by the performances of our Ethernet fabric, routing, and refreshed campus LAN portfolios. We were also able to increase profitability in a challenging environment.”

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