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May 22, 2015

Brocade misses Q2 forecast as SANS sales decline

Company saw a return to net income.

By

Brocade has reported its Q2 2015 results, showing a rise in revenue.

Revenues for the quarter hit $547 million, a rise of 2 percent year-on-year but a fall from the previous quarter. This did, however, miss Wall Street expectations of 20 cents per share with $551.33 million in revenue.

The networking company reported a net income of $77 million, compared to a net loss of $13.7 million in the equivalent period last year.

IP Networking product revenue rose 19 percent year-on-year to $145 million. This was driven by higher sales of routers and Ethernet switches, which rose 40 percent and eight percent respectively.

SAN product revenue was $314 million, down 2 percent from the previous year, with the decline explained as the result of softer storage demand and operational issues at certain OEM partners. The sequential revenue decline of 11% was at the low end of the company’s outlook for the quarter and consistent with the last two years, where the fiscal second quarters have seen sequential revenue declines of 10% to 12%.

Global Services revenue was $88 million, falling 7 percent year on year.

The board of directors declared a dividend of $0.045 per share, a 29 percent increase from the prior dividend.

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"We significantly grew our IP Networking revenue year over year and closed the acquisitions of Connectem and the SteelApp assets, expanding our strong portfolio of virtual IP networking services," said Lloyd Carney, CEO of Brocade.

Carney added: "These next-gen software-based technologies, together with our hardware products, allow us to build more strategic solutions for our customers and underscore our vision for the New IP."

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