Brocade reports improved profit margins

Brocade (NASDAQ: BRCD) said it has reported financial results for its third fiscal quarter ended August 2, 2014.

Brocade reported third quarter revenue of USD545m, up two percent year-over-year and up two percent quarter-over-quarter.

The company reported GAAP diluted earnings per share of USD0.20, down from USD0.26 in the third quarter of 2013, and up from a loss per share of USD(0.03) in the second quarter of 2014. During the third quarter of 2013, the company recognized a gain of USD77m related to the litigation settlement with A10 Networks, which increased GAAP EPS by USD0.13 in that quarter. During the second quarter of 2014, the company incurred a USD83m non-cash goodwill impairment charge associated with the strategic repositioning of the Brocade ADX product family, which decreased GAAP EPS by USD0.19 in that quarter. Non-GAAP diluted EPS was USD0.23 for the third quarter of 2014, up from USD0.19 in both the third quarter of 2013 and the second quarter of 2014, primarily due to higher revenue, improved gross margin, and lower operating expenses.

SAN business revenue, including products and services, was USD380m, up 3 percent year-over-year and flat sequentially. The year-over-year improvement was the result of 4 percent growth in SAN product revenue due to higher switch and director sales, partially offset by lower embedded product sales and the revenue impact from the divestiture of the HBA business during Q1 2014. The revenue performance was better than expected in a typically soft demand quarter.

Brocade networking solutions help the world´s leading organizations transition smoothly to a world where applications and information reside anywhere. (www.brocade.com)

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