QLogic (QLGC) is expected to report Q2 earnings after the market close on Wednesday, October 21, with a conference call scheduled for 5:00 pm ET.
Guidance
The consensus estimate is 18c for EPS and $125.71M for revenue, according to First Call. QLogic's stock is up approximately 36% in the last three months. Overall options volume in the name is several times greater than average, with calls outnumbering puts by a wide margin, with institutional-sized purchases. The shares are gaining despite management's forecast on July 22 for weaker-than-expected sales and earnings. QLogic's guidance was for sales to be flat to +3% quarter-over-quarter, implying $122.8M-$126.48m based on Q1 reported revenue of $122.8M. Guidance for Q2 EPS is for 16c-18c.
Analyst Views
RBC Capital believes that given the current signs of enterprise spending picking up in 2H09, coupled with commentary from IBM and Intel (INTC) suggesting that we are likely to see a server refresh, investors are anticipating a mid to high single digit quarter-over-quarter revenue growth from QLogic. Key items for the conference call: An update on the CNA markets and when should investors expect this to be a material revenue driver; comments on expectations with regard to revenue trends in Q3 and impact of the server refresh cycle; details on operating margin trends and the company's ability to achieve 30% EBIT margins of approximately $140M in revenues; and lastly, details on future cash deployment.
