* Q3 adj EPS $0.14 vs est $0.12
* Q3 rev $555.3 mln vs est $536.5 mln
* Says CEO Michael Klayko to resign; board starts search for
* Shares up 11 pct after the bell
Aug 16 Network storage equipment maker Brocade
Communication Systems Inc's third-quarter results beat
Wall Street estimates, boosted by a 13 percent rise in storage
equipment sales, and the company said its chief executive
intends to resign.
Shares of the company rose 11 percent after the
market-topping results but lost all of their gains on news of
the CEO's resignation.
A faltering recovery in the United States and weakness in
Europe has hit network equipment makers as telecom service
providers, their biggest customers, cut spending and delay
purchases of new equipment.
Cisco Systems Inc's Chief Executive John Chambers,
whose comments are highly regarded in the tech industry, said on
Wednesday that many of its customers continued to be hit by the
global economic slowdown and he expects CEOs to remain
conservative in their IT spending and hiring.
Brocade on Thursday said Chief Executive Michael Klayko
intends to resign once a successor is identified.
The board has formed a search committee to find Klayko's
replacement and Klayko will continue to serve as the CEO during
the search period, Brocade said in a statement
Net income rose to $43.3 million, or 9 cents per share, in
the third quarter, from $2 million, or breakeven on a per share
basis, a year earlier.
Excluding items, the company, which supplies its products
through EMC Corp, IBM and Hewlett-Packard
, earned 14 cents per share.
Revenue rose 10 percent to $555.3 million.
Storage business revenue, which contributes about 70 percent
to the total revenue, rose 13 percent to $377.6 million.
Analysts on average had expected earnings before items of 12
cents per share, on revenue of $536.6 million, according to
Thomson Reuters I/B/E/S.
Brocade's shares, which have risen 8 percent in the last
three months, have outperformed the broader Dow Jones
Telecommunication Equipment Index, which has risen 4