Brocade Communications Lowers Q2 Outlook - Quick Facts

(RTTNews) - Brocade Communications Systems Inc. (BRCD) lowered its financial outlook for the second quarter of fiscal 2016, saying that it expects revenue to fall short of its original expectations due to the general softness in IT spending. Shares of the company are down almost 10 percent in pre-market activity.

In conjunction with the filing of a registration statement and exchange offer materials with the U.S. Securities and Exchange Commission associated with its previously announced proposal to acquire Ruckus Wireless, Inc. (RKUS), Brocade reported preliminary financial results for its second quarter.

For the second quarter, Brocade now forecasts adjusted earnings in a range of $0.21 to $0.23, compared with the range of $0.22 to $0.24 in the planning assumptions and outlook for the quarter previously provided on February 17, 2016.

On average, 21 analysts polled by Thomson Reuters expect earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.

The company now expects total revenue for the quarter within the range of $518 million to $528 million, down from the prior range of $542 million to $562 million it provided in the planning assumptions and outlook for the quarter on February 17, 2016. Analysts have a consensus revenue estimate of $551.76 million.

Lloyd Carney, CEO of Brocade said, "Consistent with the general softness in IT spending reported by many of our partners and peers, we expect revenue for the quarter to fall short of our original expectations. This is largely the result of weaker than anticipated SAN revenue."

"In addition, IP Networking headwinds, noted on our fiscal Q1 2016 earnings call in February, continue to negatively impact our sales, particularly in our service provider and U.S. federal business," Carney added.

Brocade plans to report its full financial results and provide more details for its second fiscal quarter of 2016 on Thursday, May 19, 2016, following the close of the market.