Earnings Preview: QLogic

QLogic (QLGC) is expected to report Q2 earnings after market close Tuesday with a conference call scheduled for 5:30 pm ET.

Guidance

The consensus estimate is 31c for EPS and $169.80M for revenue, according to First Call.

Analyst Views

On Sept. 19, the CEO was quoted on Bloomberg saying he was "comfortable with Q2 forecast" and that guidance was "conservative". On Oct. 2, Calyon downgraded QLogic to a Reduce rating, along with several other IT Hardware companies, based on weak channel checks. The firm said the typical September bounce has not occurred and notes the worsening financial sector and slowing international economies. Caylon was equally concerned after IBM's (IBM) quarterly results, as it viewed the weakness in the server business as a negative for customer QLogic.

RBC Capital expects QLogic will at least meet expectations for the September quarter. As with many of RBC's coverage companies, the last week of September was slower than expected, and December quarter visibility is degrading as OEMs lack full clarity on end customer demand for the period. Recently, RBC Capital reduced its estimates across the board for the group and for QLogic, as it sees further degradation in global IT spending.