Brocade Results Top Estimate - Update

(RTTNews) - Brocade Communications Systems Inc (BRCD) Thursday reported a better-than-expected third-quarter profit, helped by strong increase in margins and higher revenue.

"With another solid quarter behind us, we are seeing the tangible benefits of our data center focused strategy," said CEO Lloyd Carney.

Brocade shares gained about 4 percent in after-hours trade on the Nasdaq, following the announcement of results.

Brocade, based in San Jose, California, makes computer switches for data-storage networks.

The company posted third-quarter net income of $87.4 million or $0.20 per share. This compares with a profit of $118.7 million or $0.26 per share last year, including a litigation settlement gain of $77 million.

Excluding items, adjusted earnings for the quarter were $0.23 per share, compared with $0.19 per share a year ago.

On average, 22 analysts polled by Thomson Reuters estimated earnings of $0.19 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the third quarter rose 2 percent to $545.5 million from $536.6 million last year. Analysts estimated revenue of $534.7 million for the quarter.

Storage Area Networking revenue increased 3 percent from last year year, while IP Networking revenue edged down 1 percent.

Gross margin rose 330 basis points from last year to 66.3 percent, and operating margin surged to 21.6 percent from 13.9 percent.

Brocade declared a quarterly cash dividend of $0.035 per share.

Brocade stock closed Thursday at $9.41, up $0.06 or 0.64%, on a volume of 7.4 million shares on the Nasdaq. In after hours, the stock gained $0.34 or 3.61%, trading at $9.75.