Brocade Communications zips past third quarter forecasts

Brocade Communications Systems had no trouble beating the Street estimate in its third quarter, raking in $20.1 million, or 16 cents a share, on sales of $92.1 million.

First Call Corp. consensus expected the network-equipment maker to earn 14 cents a share in the quarter.

Brocade (Nasdaq: BRCD) shares fell 5 3/4 to 196 3/4 ahead of the earnings report.

The $92.1 million marks a staggering 360 percent improvement from the year-ago quarter when it earned $1.6 million, or a penny a share, on sales of $20.1 million.

"We are delighted to report our eighth consecutive period of quarter over quarter revenue and earnings growth for our shareholders," said CEO Greg Reyes in a prepared release. ``Data storage requirements continue to increase across the board at a staggering rate."

In the quarter, gross profit margins jumped to 58.6 percent from 58 percent in the second quarter. Operating income as a percentage of sales increased to 26.1 percent in the quarter, up from 25.2 percent last quarter.

Last quarter, Brocade topped analysts' estimates, earning $13.3 million, or 11 cents a share, on sales of $62.1 million.

Brocade shares charged up to a 52-week high of 219 3/4 earlier this month after falling to a low of 38 1/4 last August.

Fourteen of the 16 analysts following the stock maintain either a "buy" or "strong buy" rating.

First Call Corp. consensus expects the San Jose, Calif. company to earn 47 cents a share in the quarter.