Back in July, tech giant Dell (Nasdaq: DELL) acquired Brocade Communication's (Nasdaq: BRCD) competitor, Force10 Networks. This made a few investors a little jumpy since they thought the acquisition would result in significant headwinds for Brocade.

However, despite its competitor's acquisition, Brocade did not show any flagging numbers in its Ethernet business. In fact, the networking solutions provider announced record fourth-quarter revenue and adjusted net profits that exceeded analyst expectations. Let's take a closer, Foolish look at what's going on with Brocade.

Figuring it out
The San Jose, Calif.-based company saw its revenue rise a tad to $550 million, a difference of just $1 million from the previous year's quarter, while it posted a net loss of $4 million versus a $22 million profit for the same quarter last year. But that was mainly due to tax provisions, higher restructuring charges, and stock-based compensation. Excluding these extraordinary items, the company actually made a profit for the quarter at $79 million from $65 million in the previous year's quarter.

In comparison, industry peer QLogic (Nasdaq: QLGC) posted a 4% decline in net income to $28.7 million in its latest quarter.

On a division basis, Brocade's storage business revenue including products and services was down 4% at $361.3 million. However, sequentially this figure was up 8% due to strong demand for all of its storage products including that of its next-generation 16 Gbps Fibre channel products.

The company's Ethernet division posted a record $189.2 million in revenue, which was up 11% from the previous year's quarter. The increase was mainly due to strong demand from service providers and enterprise customers. However, demand from the federal government was down 14% from the prior year's quarter but rebounded 39% from the previous quarter.

Is Brocade seeking a suitor?
Earlier in October, there were reports about Brocade seeking a potential buyer for its business once again. This in turn caused Brocade's shares to rally for a day. The company later claimed that it was just a rumor and declined to comment about it.

Back in 2009, the company was on the lookout for a potential suitor; however, those attempts failed to bear fruit. Nevertheless, since then, two tech biggies Hewlett-Packard (NYSE: HPQ) and Dell have acquired businesses that compete with brocade.

The Foolish bottom line
In the future, Brocade could face competition from its new Ethernet rivals HP and Dell. Besides that, there are fears that federal spending might decrease in the next quarter and there is the weak economic environment that could possibly drive down demand in the short term.

But setting aside these concerns, Brocade has delivered a good set of numbers and could receive strong tailwinds in its coming quarter. So what do you Fools think of Brocade? Let us know by leaving a comment in the box below. In addition, don't forget to stay in touch with the latest news and analysis on Brocade by adding it to your watchlist. It's free and lets you stay up to speed with the latest developments for your favorite companies. Simply click here to get started.