Seeking Alpha

Emulex -8.4%; SCOP revenue expected to tumble in FY15

  • On top of beating FQ4 estimates, Emulex (NYSE:ELX) is guiding for FQ1 revenue of $93M-$99M and EPS of $0.07-$0.11, favorable to a consensus of $94.2M and $0.06.
  • However, on the CC (transcript), the company forecast its storage connectivity/other products unit (SCOP - covers bridges, storage controllers, and other products) will decline by 30% or more in FY15 (ends June '15), as "a significant portion" of related sales enter the end-of-life stage.
  • SCOP was 17% of FQ4 revenue. As it is, the unit's sales fell 32% Q/Q and 42% Y/Y during the quarter.
  • On the bright side, Emulex thinks its slumping Fibre Channel adapter/switch business is improving, and believes (after seeing QLGC's FQ1 numbers) it grabbed 200 bps of Fibre Channel share in FQ4.
  • The company also expects Intel's upcoming Grantley Xeon server CPU launch will boost Ethernet-related sales, though it suggests much of the impact will come in the second half of FY15.
  • FQ4 results, PR
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