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.