EmailBrocade (BRCD $3.35 -1.54) lowered its third quarter earnings guidance to $0.08 to $0.09 versus the $0.11 Capital IQ Consensus Estimate, down from $0.10-0.11. On the top line, the company lowered its revenue guidance to $500 million to $505 million versus the $551.05 million Capital IQ Consensus Estimate, down from $540 million to $560 million.
Brocade anticipates that it will report $333 million to $336 million in
revenue for its Storage business, including product and services, which is down
5% to 6% year-over-year. The lower revenue range for Storage reflects a
reduction in the third quarter of approximately one-half week of Fibre Channel
inventory held at the OEMs.
In addition, the company experienced weaker-than-expected Storage end-user
demand, which was down slightly from the previous quarter. Brocade anticipates
that it will report $167 million to $169 million in revenue for its Ethernet
business, which is an increase of 12% to 13% year-over-year. The company's
Ethernet results were impacted by lower-than-expected Federal revenue as well as
a softer-than-expected IT spending environment. "Despite strong economic
headwinds that developed in the quarter, we continue to see progress and
acceptance of our Ethernet product portfolio."
