Brocade Communications Profit Rises, Stock Up - Update

(RTTNews) - Brocade Communications Systems Inc (BRCD) on Thursday reported an increase in profit for the third quarter, due largely to improved revenues and stronger margins, with both earnings and revenues trumping Wall Street estimates. Shares of the company are currently up 5 percent, following the announcement.

San Jose, California,-based Brocade Communications' third-quarter profit rose to $91.7 million or $0.21 per share from $87.4 million or $0.20 per share last year.

Excluding items, adjusted earnings for the quarter rose to $0.27 per share from $0.23 per share a year ago. On average, 20 analysts polled by Thomson Reuters estimated earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Brocade Communications, a maker of computer switches for data-storage networks, said revenues for the quarter rose 1 percent to $551.8 million from $545.5 million last year. Nineteen analysts had a consensus revenue estimate of $550.54 million for the quarter.

Commenting on the results, CEO Lloyd Carney said, "I am pleased with our Q3 2015 financial results as we delivered improved profitability and higher revenue year over year. Our IP Networking revenue growth of 16% continues to outpace the market with strong performance from both service provider and U.S. federal customers."

Looking forward to the fourth quarter, the company expects adjusted earnings of $0.23 to $0.25 per share on revenues of $565 million to $585 million. Analysts currently expect earnings of $0.24 per share on revenues of $573.7 million.

Brocade Communications also declared a quarterly dividend of $0.045 per share, payable on October 2 to shareholder of record on September 10.

BRCD closed Thursday's regular trading at $9.72, down $0.32 or 3.19%, on the Nasdaq. The stock, however, gained $0.53 or 5.45% in the after-hours trade.