February 22, 2010 / 9:44 PM / 9 years ago

UPDATE 2-Brocade full-year outlook disappoints, shares tank

* Fiscal Q1 EPS ex items $0.19 vs Wall St view $0.15

* Q1 revenue rises 25 pct, but lower than expected

* Full-year outlook disappoints

* Shares down 10 pct

(Adds outlook, share move, CEO comments)

NEW YORK, Feb 22 (Reuters) - Brocade Communications Systems Inc BRCD.O gave on Monday a lower-than-expected outlook for the full year, upsetting investors expecting the network equipment maker to benefit more from a recovery in technology spending.

The shares of the company, which makes routers and other network gear and competes with industry leader Cisco Systems Inc (CSCO.O), fell 10 percent in after hours trading, although results from last quarter showed it swung to a profit from a loss a year ago.

Brocade said its Ethernet business was not growing as strongly as expected.

“In short, our Ethernet business did not meet our revenue expectations, largely due to lower-than-expected revenues from Federal customers and slower-than-anticipated development in our go-to-market routes,” Chief Executive Mike Klayko said in a statement.

For the fiscal first quarter ended Jan. 30, Brocade reported a net profit of $51.1 million, or 11 cents per share, compared with a loss of $23.9 million, or 6 cents a share, a year earlier.

Earnings excluding items rose to 19 cents a share from 15 cents per share. That was higher than the average analyst estimate of 15 cents a share, according to Thomson Reuters I/B/E/S.

Revenue was lower than the market expected, up 25 percent year-over-year at $539.5 million. Wall Street expected revenue of $548.4 million.

But the outlook was even more disappointing. Brocade said it expects revenue growth of around 8 percent to 12 percent for the full year. The average analyst estimate was for growth of around 15.7 percent.

The company also forecast full-year earnings excluding items of 54 cents to 58 cents a share, lower than the average outlook for a an adjusted profit of 60 cents a share.

Brocade shares fell to $6.25 in after-hours trading, down 10.2 percent from their close at $6.96. (Reporting by Ritsuko Ando; editing by Andre Grenon)

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