Data and storage communications company reveals earnings of $0.26 per share.
Brocade Communications Systems saw its stock rise 18% yesterday after surpassing analysts’ estimates to reveal share earnings of $0.26 for its third quarter.
The data and storage communications firm beat predictions of share earnings of $0.12 as it revealed its overall revenue to be $536.6m, still down 3% compared to the same quarter last year.
However, the company reported it had exceeded its revenue target, while the share increase meant net income almost tripled from last year to $118.7m.
The business said much of its income was down to a revival in the storage market, which still fell 2%, though admitted $76.8m gained in the quarter related to a litigation settlement.
CEO Lloyd Carney said: "The storage market is recovering more quickly than we had anticipated entering our third quarter and, coupled with continued strong adoption of Gen 5 Fibre Channel, contributed to good Storage Area Networking (SAN) revenue results."
Its products are used in SANs which pool storage resources in big companies to make them easier to manage.
And Brocade expects SAN revenue to rise between 1% and 4% in the current quarter compared to the third quarter.
Carney said: "We are seeing a rebound occurring in the broader storage market and believe that the recovery will strengthen for the remainder of this calendar year."
He blamed sales to the US Government for the revenue drop, adding: "In IP Networking, our federal sales were disappointing. We are making great progress toward our spending reduction goal, and are already seeing the benefits in our financial results and cash flow."