Brocade turns its back on bad times

Storage switching and network equipment market keeps booming, as Brocade turns in good figures following its stock option problems

After a bumpy year, Brocade has turned in a good set of figures for the past financial quarter that should reassure its customers and shareholders.

In the three months to 27 January, 2007, the storage switching and network equipment company tripled its profits to $33.3m (£16.9m), compared to $9.7m in the same period in 2006.

This comes less than a year after Brocade put aside $7m (£3.5m) for a proposed settlement with the Securities and Exchange Commission, following an investigation into the way the company had handled its employee share options.

With these problems now largely behind it, Brocade has shown healthy growth in profits and turnover. While the full effect of the acquisition of McData, which was completed in January 2007, has yet to be felt, Brocade's revenue rose by 7 percent, compared to the previous quarter, to $224.2m (£112m), and by 32 percent year on year.

"We are starting the combined company from a position of strength with many opportunities to extend our leadership position in core SAN switching and to continue broadening our innovative solutions in the enterprise data centre," said Michael Klayko, Brocade chief executive.

Brocade's share price has risen 77 percent since it hit a 52-week low of $4.91 in August.

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