* Q1 adj EPS $0.20 vs est $0.13
* Q1 rev up 3 pct at $561 mln vs est $542.4 mln
* Sees Q2 adj EPS $0.11-$0.12 vs est $0.12
* Sees Q2 rev $530-$545 mln vs est $537 mln
* Shares rise 7 pct after hours
By Siddharth Cavale and Nicola Leske
Feb 21 Network gear maker Brocade
Communications Systems Inc reported
better-than-forecast quarterly results, helped by a rise in
sales of its storage equipment products, and said it expects
faster growth at the ethernet segment this year.
Shares of Brocade, which have rebounded more than 80 percent
from their August 2011 lows, jumped 7 percent to $5.85 in
after-hours trading on Tuesday.
The company expects its ethernet business to "fully outpace"
the market in terms of year-over-year growth as many enterprise
customers continue to build out their ethernet fabrics to keep
pace with the growing demands of their data center networks.
In the first quarter, sales at the ethernet business, which
contributes about 30 percent to total revenue, fell 18 percent
sequentially, hurt by softness in federal sales and lower
"Q1 (for ethernet) was what it was and we are expecting to
get back to growth in Q2 and beyond," the company said.
Revenue rose 3 percent to $561 million in the quarter. Sales
from the company's storage segment grew 4 percent to $406.4
"They are very dependent on the U.S. economy, which is doing
better. They have the right strategy but we're in a risky
environment," analyst Edward Zabitsky of ACI Research said and
added the company was also facing a lot of pressure from rivals
like Cisco Systems.
The San Jose, California-based company forecast earnings of
11 cents to 12 cents a share on revenue of $530 million to $545
million for the second quarter.
Analysts, on average, were expecting the company to earn 12
cents a share, on revenue of $537 million, according to Thomson
For the first quarter, the company posted an adjusted profit
of 20 cents a share, 7 cents above the average analyst
Last month, Reuters reported the company had received
first-round bids from a handful of potential buyers and hired
Frank Quattrone's Qatalyst Partners to focus on a deal that
could result in a leveraged buyout.
Shares of Brocade, whose current sale process is the third
since 2009, closed at $5.50 on the Nasdaq.