Shares of data-storage company McData (NASDAQ:MCDTA) are off 10% today on management's so-so fourth-quarter guidance. McData released third-quarter earnings after the bell yesterday, and while they met lowered expectations, they weren't exactly blockbusting. This double dose of tepid news was enough to frustrate investors.

McData, which competes with firms like Brocade Communications (NASDAQ:BRCD) and Cisco Systems (NASDAQ:CSCO), has battled its own customers over pricing. Put plainly, customers want better prices, and McData's hesitant to meet their demands. It was a dispute with key customer EMC (NYSE:EMC), in fact, that prompted McData to lower expectations for its third quarter back in October.

As expected, McData lost $50 million for the third quarter, or $0.44 a share, including charges. Excluding charges, McData earned $2.1 million, or $0.02 a share, about what it earned on the same basis in last year's Q3. Revenues were up 17% to $94.7 million. Before it lowered its Q3 outlook, McData had anticipated revenues of $107-$112 million.

For its fourth quarter, McData anticipates earnings excluding charges to come in around breakeven, or $0.01 per share on revenues of $108 million-$116 million. Analysts had been expecting earnings of $0.03 a share on sales of $116 million.

Whether these expectations are realistic is anyone's guess, but investors looking for signs that McData has the pricing situation and competition under control can't be too optimistic.

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