What: Shares of Brocade Communications Systems (NASDAQ:BRCD) jumped on Thursday following the company's fiscal first-quarter earnings report. Brocade beat analyst estimates for both revenue and earnings, and its guidance was in line with analyst expectations. At noon Thursday, the stock was up about 14%.
So what: Brocade reported quarterly revenue of $574 million, down 0.35% year over year but about $13 million higher than the average analyst estimate. SAN product revenue slumped 2% year over year to $347 million, driven by weak demand for embedded and fixed-configuration Fibre Channel switches. IP networking product revenue grew by 1% year over year to $134 million, driven by strong demand from enterprise customers, offset by weak demand from U.S. federal government customers.
Brocade reported non-GAAP earnings per share of $0.29, up from $0.27 during the prior-year period and $0.05 higher than analyst expectations. Non-GAAP operating income declined during the quarter, falling 9% year over year, but a substantially lower tax rate allowed the company to report earnings growth for the quarter. Share buybacks, totaling $144.5 million during the quarter, also helped boost per-share numbers.
Now what: In addition to beating analyst estimates. Brocade provided guidance that met expectations. The company expects second-quarter revenue between $542 million and $562 million, compared to an average analyst estimate of $550.9 million. Non-GAAP EPS is expected between $0.22 and $0.24, compared to analyst expectations of $0.22.
Overall, the quarter wasn't a particularly good one for Brocade, with revenue declining and earnings growth driven solely by a lower tax rate and share buybacks. But with the stock down about 30% over the past year, the better-than-expected results were enough to send the stock soaring.
Timothy Green has no position in any stocks mentioned. 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.