Brocade (BRCD) reported a negative second quarter result, with revenue of $539 million showing a decline of 8% quarter over quarter. This was mostly because of a weaker Storage Area Networking, or SAN, market. In the second quarter, SAN revenue was $319 million, showing a decline of 7% year-over-year. This was because of enterprises' reduced spending for storage solutions. The company's management further expects an 8% to 11% fall in storage revenues in the third quarter this year.
Despite negative sales, one good aspect of Brocade's second quarter result is its high gross profit margin of SAN business at the 50% level. Still, its lack of earning power raises concerns about...
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