Brocade Communications Systems
The 10-second takeaway
For the quarter ended Jan. 26 (Q1), Brocade Communications Systems beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share shrank to a loss.
Gross margins expanded, operating margins expanded, net margins contracted.
Brocade Communications Systems notched revenue of $588.7 million. The 24 analysts polled by S&P Capital IQ expected sales of $575.6 million on the same basis. GAAP reported sales were 5.0% higher than the prior-year quarter's $560.6 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 $0.21. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.16 per share. GAAP EPS were -$0.05 for Q1 versus $0.12 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 63.5%, 200 basis points better than the prior-year quarter. Operating margin was 15.8%, 340 basis points better than the prior-year quarter. Net margin was -3.6%, 1,400 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $563.0 million. On the bottom line, the average EPS estimate is $0.15.
Next year's average estimate for revenue is $2.31 billion. The average EPS estimate is $0.63.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 725 members out of 770 rating the stock outperform, and 45 members rating it underperform. Among 112 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 106 give Brocade Communications Systems a green thumbs-up, and six 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 $6.30.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.