Brocade Communications Systems
The 10-second takeaway
For the quarter ended April 28 (Q2), Brocade Communications Systems met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share increased significantly.
Margins grew across the board.
Brocade Communications Systems booked revenue of $543 million. The 27 analysts polled by S&P Capital IQ expected sales of $540.9 million on the same basis. GAAP reported sales were 0.9% lower than the prior-year quarter's $548.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.15. The 28 earnings estimates compiled by S&P Capital IQ averaged $0.12 per share. GAAP EPS of $0.08 for Q2 were 60% higher than the prior-year quarter's $0.05 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 62%, 210 basis points better than the prior-year quarter. Operating margin was 9.5%, 110 basis points better than the prior-year quarter. Net margin was 7.2%, 250 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $540.3 million. On the bottom line, the average EPS estimate is $0.12.
Next year's average estimate for revenue is $2.22 billion. The average EPS estimate is $0.61.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 723 members rating the stock outperform and 45 members rating it underperform. Among 106 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 101 give Brocade Communications Systems a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Brocade Communications Systems is hold, with an average price target of $6.27.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.