But the company also forecast its gross margin will drop to 62%-63% from FQ1's 64.4%, and said it's "comfortable" with a 62-63% GM for the whole of FY15.
Perhaps more worrying than the guidance itself is the explanation: A mix shift towards Ethernet product sales, which are expected to grow by $3M-$4M Q/Q. With QLogic's core Fibre Channel market expected to keep declining, the company is counting on Ethernet sales (a double-digit % of revenue following the purchase of Broadcom's Ethernet controller unit), along with its budding storage ASIC business, to drive growth.
CFO Jean Hu previously estimated the Ethernet business has only a ~40% gross margin. When pressed yesterday on Ethernet's long-term impact on Emulex's margins, she argued the company will be able to reap "manufacturing cost synergies" beyond FY15.
Archrival Emulex (ELX -2.3%) followed QLogic lower. The company reports on Aug. 7.