Why Brocade Communications Systems Inc (NASDAQ:BRCD) Makes Good With Q3


Dallas, Texas 08/26/2014 (FINANCIALSTRENDS) – Brocade Communications Systems Inc (NASDAQ:BRCD) the key player in the communications sector is seeing much upside on the stock markets following the result reports of its third quarter results.

The company saw different growth curves in the varied services it currently offers. The struggles of Fibre Channel makers in recent times have been well documented but fortunately for Brocade its SAN products have proved to be successful.

In comparison to Emulex and QLogic, Brocade’s revenue saw a fulfilling 60%, in the first quarter-based comparison over past year.

Brocade Communications Systems Inc (NASDAQ:BRCD) SAN switch and director sales saw a price rise of 9% and 5% respectively. It also offset the 11% drop in server products such as adapter/embedded switch sales. Other segments such as the IP networking revenue too marked a rise of 9% in the quarter – based comparison. But as has been the trend in recent times, this large-sized player too was found wanting on the router product segment.

Brocade Communications Systems Inc (NASDAQ:BRCD) did balance out the overall performance through a drop in server sales, even as its SAN switches and director sales marked substantial rise.

The OEM partner which in this case is IBM is currently working through a geo-political transition, which in turn has been affecting Brocade’s numbers.

But to watch-out for is the in-line guidance for the next quarter. The company has announced that the in-line consensus provisions and expects to see the company scale additional prices on the stock market!

The gross margin was found to rise by 50 basis points on a quarterly comparison. The fourth quarter guidance holds significance is at 66% to 67%. The company during the reporting of the financial results has involved in buybacks to the tune of $112 million.