August 19, 2008
BROCADE Communications Systems, the largest maker of switches for data storage networks, has reported a profit that beat analysts' estimates after an acquisition boosted its services unit.
Third-quarter net income almost doubled to $US20.3 million ($23.6 million), or US5c a share, Brocade says.Excluding costs such as legal expenses, profit was $US0.16, topping the $US0.14 average of estimates compiled by Bloomberg.
Chief executive Michael Klayko bought Strategic Business Systems in March, helping to increase sales from network support and maintenance by 43 per cent to $63.9 million.
He is also using acquisitions to accelerate growth in products, agreeing to pay $US3 billion for Foundry Networks to add switches and routers based on a new version of ethernet technology.
Fourth-quarter sales will amount to $US375-385 million, chief financial officer Richard Deranleau says.
Analysts on average projected $US373.6 million. Excluding some costs, profit will be US15-16c a share, in line with estimates.
Brocade advanced US22c to $US7.45 in trading before exchanges opened, after closing at $US7.23 on the Nasdaq.
The shares had dropped 1.5 per cent this year before yesterday.
Bloomberg