Brocade Communications Profit Rises, But Shares Fall On Weak Outlook

(RTTNews) - Brocade Communications Systems Inc (BRCD) on Monday reported an increase in profit for the fourth quarter, due largely to improved revenues and stronger margins, with both earnings and revenues trumping Wall Street estimates. However, shares of the company slipped over 6 percent on weak outlook.

San Jose, California,-based Brocade Communications' fourth-quarter profit rose to $84.4 million or $0.20 per share from $83.4 million or $0.19 per share last year.

Excluding items, adjusted earnings for the quarter rose to $0.26 per share from $0.24 per share a year ago. On average, 20 analysts polled by Thomson Reuters estimated earnings of $0.24 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 4 percent to $588.8 million from $564.4 million last year. Analysts had a consensus revenue estimate of $575.1 million for the quarter.

Gross margin rose to 67.0 percent from 66.8 percent last year.

Brocade declared a quarterly cash dividend of $0.045 per share, payable on January 4, 2016, to shareholders of December 10, 2015.

Looking forward to the first quarter, the company expects revenues of $550 million to $570 million and adjusted earnings of $0.23 to $0.25 per share. Analysts currently estimate earnings of $0.26 per share and revenues of $582.17 million.

BRCD closed Monday's trading at $10.09, up $0.24 or 2.44%, on the Nasdaq. The stock, however, dropped $0.69 or 6.84% in the after-hours trade.