Brocade Communications Pulls Back Its Outlook
May 02 2016 - 11:10AM
Dow Jones News
Brocade Communications Systems Inc. said its second-quarter
results fell short of its previous guidance forecasts, citing
overall softness in information-technology spending.
Shares pulled back 11% to $8.57 in early trading in New York.
Including that decline, the stock has still risen 9.3% in the past
three months.
The networking-solutions company now expects $518 million to
$528 million in revenue, compared with the range of $542 million to
$562 million it provided in February. The company expects adjusted
profit between 21 cents and 23 cents a share, down from a prior
range of 22 cents to 24 cents. Analysts polled by Thomson Reuters
were expected 23 cents a share on $551.8 million.
Lloyd Carney, Brocade's chief executive, said the results
reflected softness in IT spending. Mr. Carney pointed to weaker
demand from the U.S. government and in its service provider
business.
Sunnyvale, Calif.-based Brocade was originally known for
networking hardware used in data storage applications, but it has
branched into other networking segments, including routers and
switches sold in competition with the likes of Cisco Systems
Inc.
Brocade agreed in April to buy Ruckus Wireless for about $1.2
billion amid a series of moves by network-equipment companies to
expand their Wi-Fi offerings.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 02, 2016 10:55 ET (14:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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