Brocade Q2 misses on revenue as SAN sales decline

Brocade Communication Systems reported second quarter earnings and revenue Thursday after the bell.

The networking solutions provider reported a net income of $86.9 million, or 19 cents per share (statement).

Non-GAAP earnings were 22 cents per share on a revenue of $547 million, up two percent year-over-year.

Wall Street was looking for earnings of at least 20 cents per share with $551.33 million in revenue.

In prepared remarks, Brocade CEO Lloyd Carney acknowledged lower than expected SAN revenue, but focused attention on growth in IP Networking revenue, which was up 19 percent year-over-year.

Brocade CFO Dan Fairfax said the IP growth was "primarily due to stronger router revenue and increased sales to both service provider and U.S. federal customers."

The two-percent drop in SAN revenue was "primarily the result of softer storage demand and operational issues at certain OEM partners, which impacted low-end switch and server blade revenue." Fairfax added.

For the current quarter, Brocade expects revenue between $540 million and $560 million, with earnings per share between 21 cents and 23 cents.

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