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Brocade beats estimates amid storage boom

Brocade Communications Systems, benefiting from attention to high-end networks dedicated to data storage, beats analyst expectations by 2 cents.

Brocade Communications Systems shares surged Thursday, after the storage network company beat analyst expectations by 2 cents for its fiscal fourth quarter.

Benefiting from attention to high-end networks dedicated to data storage, Brocade Wednesday reported net income of $27.2 million, or 22 cents a share, on revenue of $132 million. In mid-day trading today, shares rose $12.75, or 8 percent, to $166.50.

In addition, the San Jose, Calif., company said it plans a 2-for-1 stock split that will take effect Dec. 22. Brocade makes networking switches that link together storage devices with servers on special-purpose networks called storage area networks (SANs). SANs, while fast and reliable, are complex and expensive to set up.

In the quarter, which ended Oct. 28, Brocade's revenue grew 306 percent from the year-ago quarter, when the company had $30.1 million in sales. Net income grew 665 percent from the year-ago quarter's $3.6 million. Gross margin, a measure of profitability, was 60 percent.

Wall Street analysts surveyed by First Call/Thomson Financial expected net income of 20 cents a share.

"As our financial results demonstrate, the SAN market opportunity in 2000 was vastly underestimated," chief executive Greg Reyes said in a statement.

In October, Brocade announced plans for a new 64-port SAN switch.