Brocade Communications Systems Inc [BRCD] announced quarterly results in line with guidance, but forecast slow growth.
Despite the usual seasonal increase in spending at year-end, the SAN switch and director maker predicted only mild sales growth in its current fiscal quarter closing at the end of January, and forecast flat growth for the next quarter.
For its fourth fiscal quarter ended October 25, 2003, Brocade posted a GAAP net income of $14.8 million, down 6% year-on-year, on revenue of $137.8 million, down 10% year-on-year, but up 3% sequentially. That net income was reduced to a non-GAAP figure of $4.6 million when an $11 million tax gain and other adjustments were taken account of. For the full fiscal year, the company posted a GAAP net loss of $136.2 million, compared to $59.7 million in the previous year, on revenue of $525.3 million, down 7% year-on-year.
Guidance for the company’s first fiscal quarter closing at the end of January 2004 was for revenue between $140 and $145 million, and non-GAAP earnings of $0.02 to $0.03 per share. For the company’s second fiscal, Brocade said it expects only flat revenue, because of seasonality in high-end sale, and other factors.
The company also said that it runs a 52-53 week accounting, which means that in every fifth year – including 2004 – its second fiscal quarter runs includes an extra week. That means that the company will incur $3 to $4 million extra expenses for the coming fiscal quarter. But that also means that there will be an extra week of sales, which will be factored in.
Brocade is approaching the release of its Fabric Application Platform, the smart switch. Brocade said it anticipates revenues from this device in its third and fourth fiscal quarters. It also hinted at other products that it is due to release, including bladed and embedded products, which are likely to include new low-end and mid-range products based on the Bloom silicon it is developing, and which it needs to sell in order to lower its manufacturing costs.
This article was based on material originally published by ComputerWire.