Brocade posts flat revenue growth in Q2 FY 214 to $537 million

Enterprise networking vendor Brocade said it posted flat revenue growth to $537 million in the second fiscal quarter of 2014.

The company reported a loss per share of $0.03 compared with a profit of $0.10 per share in Q2 2013. The loss was due to $83 million non-cash goodwill impairment charge associated with the strategic repositioning of the ADX product family.

Lloyd Carney, CEO of Brocade, said: “We see increasing customer interest in software networking and Ethernet fabric technology as we drive innovation and disruption in data center networking.”

Brocade said its SAN business revenue increased 1 percent to $379 million, primarily due to higher sales within the switch and embedded products as well as increased support revenue.

IP Networking business revenue dipped 4 percent to $157 million, due to lower sales to the U.S. Federal government, the divestiture of the network adapter business, and the change in the Company’s wireless business strategy.

During Q2 2014, 57 percent of IP Networking product revenue came from data center customers, up 7 points.

In Q2 2014, Brocade, as part of its long-term strategy, reduced investment in the hardware-based ADX products and increased investment in the software-based ADX products for the Layer 4-7 market.

Following this, Brocade expects hardware-based ADX and related support revenue to be negatively impacted by $20 million to $40 million on an annualized basis compared with fiscal 2013 results.

InfotechLead News Team