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Earnings Coverage - Brocade Communications Systems

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LONDON, September 2, 2014 /PRNewswire/ -- has issued free post-earnings coverage on Brocade Communications Systems Inc. (NASDAQ: BRCD). The company reported its financial results for the third quarter ended August 02, 2014 on Thursday, August 21, 2014. For Q3 FY14, Brocade Communications Systems Inc.'s revenue grew 2% both Y-o-Y as well as Q-o-Q. Our free coverage report can be accessed at:

Earnings Overview  

Brocade Communications Systems Inc.'s revenue for Q3 FY14 stood at $545.46 million, compared with $536.55 million in the year ago comparable quarter. During Q3 FY14, the company reported GAAP diluted EPS of $0.20 per share, down from $0.26 in Q3 FY13, but significantly up from loss per share of $0.03 in Q2 FY14. Analysts from Bloomberg were expecting the company to report revenue of $535.19 million and GAAP diluted EPS of $0.16 in Q3 FY14. On a non-GAAP basis, the company's diluted EPS for the reported quarter increased to $0.23 from $0.19 in both Q3 FY13 and Q2 FY14, driven primarily by higher revenue, improved gross margin, and lower operating expenses. The company's GAAP gross margin for Q3 FY14 improved to 66.3% from 63% in Q3 FY13 and 66.0% in Q2 FY14, and its GAAP operating margin also increased to 21.6%, compared with 13.9% in the preceding year quarter and 3.8% in the prior sequential quarter. However, during Q3 FY14, Brocade Communications Systems Inc.'s GAAP net income decreased to $87.35 million, from $118.70 million in the previous year quarter. The free research on BRCD can be downloaded as in PDF format at:

Lloyd Carney, CEO of Brocade Communications Systems Inc., stated in the press release that with another quarter of solid results, the company is seeing the tangible benefits of its data centre focused strategy. He added that the resilience and durability of its SAN (Storage Area Network) business, along with robust Brocade VDX® sales has validated the company's strategic direction. Mr. Carney further stated that the company will continue to leverage its core competencies in hardware and software networking for its growth, and will remain focussed on delivering a world-class customer experience, even in the most demanding environments.

During Q3 FY14, Brocade's SAN business, including products and services, generated a revenue of $380 million, up 3% Y-o-Y and flat sequentially. The Company attributed the Y-o-Y increase to a 4% growth in SAN product revenue, which came about from higher switch and director sales. On the other hand, the company's IP networking business revenue, including products and services, for the reported quarter stood at $166 million, down 1% Y-o-Y but up 5% sequentially. The sequential increase was driven by higher sales of Ethernet switching products to the US Federal government and strong Brocade VDX sales to data centre customers. During the reported quarter, the company repurchased 12.8 million of company shares for $112 million and also declared a quarterly cash dividend of $0.035 per share of the company's common stock. The dividend payment will be made on October 02, 2014 to the stockholders of record as of September 10, 2014. Sign up and read the free analyst's notes on BRCD at:

Stock Performance    

On Friday, August 22, 2014, a day after the earnings release, shares in Brocade Communications Systems Inc. gained 3.51% to end the session at $9.74. The stock has been gaining ever since, and on the last close, Friday, August 29, 2014, the stock ended the day at $10.55, advancing 1.05% over its previous day's close. A total of 4.81 million shares were traded, which was above its three months average volume of 4.76 million shares. Over the previous three trading sessions and in the last one month, the company's shares have gained 2.23% and 16.32%, respectively. Moreover, the stock has advanced 19.01% from the beginning of 2014. Shares in Brocade Communications Systems Inc. are trading above their 50-day and 200-day moving averages of $9.38 and $9.28, respectively. Furthermore, on the last close, the stock traded at a PE ratio of 16.23 and has a Relative Strength Index (RSI) of 80.77. Visit Investor-Edge and access the latest research on BRCD at:

Sneak Peek to Corporate Insider Trading  

In the last one month, there were six insider selling transactions made by five insiders for a total of 56,085 shares of Brocade Communications Systems Inc. worth $509,850.80 at an average price of $9.10 a share. On August 01, 2014, Carney Lloyd, CEO of Brocade Communications, disposed 19,219 shares worth $174,316 at a price of $9.07 per share. In addition, on August 11, 2014, he sold another 6,445 shares, worth $59,616.20 at a price of $9.25 per share. Moreover, four other insiders sold a total of 30,421 shares of Brocade Communications Systems Inc. worth $275,918.60 at $9.07 per share on August 01, 2014. Complimentary in-depth research on BRCD is available at:


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