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Brocade tops 2Q estimates

Brocade Communications Systems (Nasdaq: BRCD) hurdled analyst forecasts in the second quarter.

After market close Monday, the largest vendor of switches for fibre channel storage networks reported fiscal second quarter net income of $13.3 million, or 11 cents per share. First Call's survey of 15 analysts predicted a profit of 8 cents per share for the quarter ended April 29.

Shares of Brocade shot up to 123 1/4 in afterhours activity on the Island electronic communications network, following the earnings report. The stock closed Monday's regular trading at 114 15/16, up 8 1/16 for the session.

Second quarter revenue increased to $62.1 million, up 489 percent year-over-year and up 42 percent sequentially. Systems integrators generated 25 percent of Brocade's revenue.

Gross margins rose to 58 percent from 53 percent in the first quarter. The company had $111.5 million in cash and short-term investments at the end of the quarter.

San Jose, Calif.-based Brocade is benefiting from the explosive surge in digital data accompanied by the rapid growth of the Internet. Its customers include Compaq Computer (NYSE: CPQ), Dell Computer (Nasdaq: DELL) and EMC (NYSE: EMC). The company said it signed up six new so-called original equipment manufacturers that will add to sales soon.

"The storage market is explosive," Brocade President and CEO Greg Reyes told Reuters. "What we're seeing is rapid data explosion across all industries.">