Thu, Feb. 26, 10:39 AM
- Brocade (NASDAQ:BRCD) has joined QLogic in getting a lift from news Avago is buying Fibre Channel/Ethernet adapter card and controller maker Emulex for $609M. The purchase follows Avago's 2014 purchase of storage controller/adapter card and hard drive SoC maker LSI.
- Brocade's product line (heavily revolves around Fibre Channel and Ethernet switches) is more complementary to Emulex's offerings than competitive, particularly following last year's sale of Brocade's Fibre Channel adapter business to QLogic. But the companies do share many of the same server/storage OEM clients.
Thu, Feb. 19, 6:02 PM
- Brocade (NASDAQ:BRCD) guides in its FQ1 earnings slides (.pdf) for FQ2 revenue of $540M-$560M and EPS of $0.19-$0.21 vs. a consensus of $548.1M and $0.21.
- The outlook assumes a $2M-$3M contribution from Riverbed's SteelApp ADC unit, whose acquisition was announced just two weeks ago and likely isn't factored into some analyst estimates. However, many enterprise IT firms have already guided light at least partly due to forex pressures (that includes major Brocade clients EMC and IBM).
- FQ1 SAN revenue fell 1% Y/Y to $353M, and IP networking revenue (Ethernet switch, virtual router, etc.) rose 11% to $133M. SAN revenue is expected to be down 2% to up 1% Y/Y in FQ2, and IP networking revenue up 13-21% Y/Y.
- Gross margin rose 70 bps Q/Q and Y/Y to 68.4%; FQ2 GM guidance is at 66.2%-67.2%. GAAP operating expenses fell by $900K Y/Y to $250.3M (cost cuts), and $132.4M was spent on buybacks (boosted EPS).
- BRCD +1.4% AH to $12.75.
- FQ1 results, PR
Thu, Feb. 19, 4:16 PM| 1 Comment
Wed, Feb. 18, 5:35 PM
Thu, Feb. 12, 11:03 AM
- Cisco (NASDAQ:CSCO) beat FQ2 estimates on the back of 8% Y/Y product growth (aided by favorable comps), offered in-line guidance (better than feared, given forex pressures), and reported a 5% increase in product orders. Enterprise, SMB, and public sector orders respectively rose 10%, 8%, and 7%, and service provider orders dropping 1% (compares with a 10% FQ1 service provider drop).
- Cisco still isn't modeling a rebound in service provider or emerging markets demand for several quarters, and forecasts global service provider capex will be down by a mid-single digit % in 2015. But it's more optimistic about enterprise, public sector, U.S., and EMEA demand.
- Telecom and networking equipment vendors, many of whom have been hit hard by capex pressures, are rallying following Cisco's numbers, as are a couple of component/chip suppliers. The Nasdaq is up 0.7%.
- Notable gainers include Alcatel-Lucent (ALU +4.7%), Aruba (ARUN +3.4%), Ruckus (RKUS +5.1%), Sonus (SONS +3.4%), Extreme Networks (EXTR +3.4%), Brocade (BRCD +1.9%), Adtran (ADTN +3%), Infoblox (BLOX +2.7%), Finisar (FNSR +2.1%), Cavium (CAVM +2%), Ixia (XXIA +1.9%), and Mavenir (MVNR +3.4%).
- Cisco's 18% Y/Y wireless product sales growth appears to be going over well with Aruba and Ruckus investors, and its 11% switching growth with Extreme and Brocade investors.
Fri, Feb. 6, 10:14 AM
- Ahead of its acquisition by P-E firm Thoma Bravo, Riverbed has struck a deal to sell its SteelApp virtual (software-based) application delivery controller (ADC) business to Brocade (BRCD +0.6%) for an undisclosed sum. JPMorgan observes the business had 2014 revenue of $55M.
- ADCs balance loads and provide other higher-level traffic management and security services to servers running Web and enterprise apps. The market's growth has slowed in recent years, but the virtual ADC segment has been a strong point - Dell'Oro estimates virtual ADC sales grew 17% Y/Y in Q3, while physical ADCs fell 1%.
- SteelApp has a bit in common with Brocade's Vyatta virtual router line: They both offer software that allows networking functionality to be migrated to commodity hardware, and thereby serve as examples of network functions virtualization (NFV).
- Brocade, which had already developed a virtual ADC through Vyatta: "We are thrilled to add SteelApp's widely-adopted solution to our portfolio and will invest our existing ADC resources to aggressively advance [our] roadmap and extend it into our open Vyatta Platform offering for NFV and SDN."
- The purchase takes aim at F5 (FFIV +1.2%), which has long dominated the ADC market (52% estimated Q3 share) with the help of its proprietary TMOS OS and related ecosystem, but which also hasn't been immune to the ADC hardware market's slowdown. F5 stated on its FQ1 CC (transcript) virtual ADCs were the fastest-growing part of a software business that saw 44% Y/Y growth.
Thu, Feb. 5, 12:18 PM
- Citi has upgraded Brocade (BRCD +2.6%) to Buy from Sell, and set a $15 target.
- The Fibre Channel/Ethernet switch vendor is at its highest levels since mid-January, and less than $0.50 away from a 52-week high of $12.43. Citi's upgrade comes ahead of Brocade's Feb. 19 FQ1 report.
Tue, Jan. 13, 10:33 AM
- Emulex (NYSE:ELX) now expects FQ2 revenue of $110M-$111M and EPS of $0.23-$0.24, above prior guidance of $102M-$108M and $0.14-$0.18; consensus is at $105.7M and $0.16.
- CEO Jeff Benck: "Emulex finished calendar year 2014 in a much stronger position led by a resilient Fibre Channel sector and benefiting from solid execution and customers' embrace of our current product cycles." The company sees a "broad slate of OEM qualifications of our 10Gb Ethernet products designed for next generation x86 servers [ramping] in the market over the next year."
- Full FQ2 results arrive on Jan. 29. Improving server demand appears to have provided a lift.
- Archrival QLogic (QLGC +5.7%) and InfiniBand/Ethernet adapter and switch vendor Mellanox (MLNX +3%) are also outperforming, as is Fibre Channel switch leader Brocade (BRCD +3.2%). The Nasdaq is up 1.7%.
Wed, Jan. 7, 5:03 PM
- Gale England, Brocade's (NASDAQ:BRCD) SVP of operations since Dec. 2013, has been promoted to the newly-created role of COO. England's resume includes stints at Sonus, Nortel, and other telecom/networking equipment providers.
- Brocade has also announced it's selling $500M worth of convertible senior notes due 2020. Initial purchasers are expected to have a $75M overallotment option.
- Up to $100M of the proceeds are expected to be used on buybacks. The rest will be used to redeem Brocade's 6.875% senior notes due 2020, and for "general corporate purposes." Brocade had $1.26B in cash as of Nov. 1, and $595M in debt.
- BRCD -1.6% AH on account of the convertible offering.
Dec. 18, 2014, 2:04 PM
- With the help of stronger-than-expected hardware sales, Oracle (ORCL +9.2%) beat FQ2 estimates in spite of a 400 bps forex headwind (twice what was originally expected). FQ3 guidance was conservative after taking forex pressures into account.
- The numbers have been good enough for Oracle to surge to new highs and receive a slew of target hikes, and to lead many enterprise tech names to outperform amid a big market rally. The Nasdaq is up 1.9%.
- Microsoft (MSFT +3.2%), Cisco (CSCO +2.3%), EMC (EMC +3.7%), VMware (VMW +5.1%), and beaten-down IBM (IBM +2.8%) are among the enterprise tech names outperforming today. Others: SPLK +4.6%. CA +3.5%. RHT +3.4%. VRNS +6.3%. PCTY +5.8%. JIVE +4.6%. VMEM +5.2%. SAAS +4.7%. BRCD +3.8%.
- Oracle's healthy cloud software numbers are drawing attention: While traditional software license revenue fell 4% Y/Y, its SaaS/PaaS revenue rose 41%. SaaS/PaaS bookings totaled $170M, and are expected to be "well over" $1B in FY16 (ends May '16). Fusion cloud app bookings rose over 100%.
- On the CC (transcript), Oracle performed its customary trash-talking of cloud app rivals. "We are clearly growing faster than Salesforce (CRM +4%) and were more than three times the size of Workday (WDAY +3.2%)." Both firms are posting solid gains.
- Oracle's numbers come as Bloomberg reports the Chinese government is looking to "purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020." IBM, Cisco, and other U.S. firms have already seen their Chinese sales fall sharply following last year's NSA spying uproar.
Nov. 24, 2014, 5:15 PM
- Brocade (NASDAQ:BRCD) guides in its earnings slides (.pdf) for FQ1 revenue of $560M-$580M and EPS of $0.23-$0.25. SAN revenue is expected to rise 5%-7% Q/Q (seasonal strength), an IP networking revenue to fall 8%-14% (federal and service provider weakness). Services revenue is expected to rise 1%-3%.
- FQ4 SAN revenue was roughly flat Q/Q and Y/Y at $379M, and up 2% Y/Y when adjusted for the sale of Broacade's adapter business to QLogic. Director (high-end switch) revenue fell 5% Y/Y and server product revenue (hurt by the QLogic deal and soft OEM demand) 27%, but standard SAN switch revenue rose 6%.
- IP networking revenue rose 12% Q/Q and 4% Y/Y. A pickup in router demand and a 38% Y/Y increase in U.S. federal sales drove the growth.
- Gross margin was 67.7%, +50 bps Q/Q and Y/Y, and beating guidance of 66%-67%. FQ1 guidance is at 66.5%-67.5%. Opex was 40.9% of revenue vs. 41.5% in FQ3 and 40.6% a year ago. $33M was spent on buybacks.
- EMC, H-P, and IBM accounted for 44% of revenue, down from 48% in FQ3 and 46% a year ago.
- BRCD -1.1% AH. FQ4 results, PR
Nov. 24, 2014, 4:19 PM| Comment!
Nov. 23, 2014, 5:35 PM
Sep. 25, 2014, 6:19 PM
- Though Brocade (BRCD +2.3%) is best known for its storage and IP networking hardware, this year's investor day saw Brocade's traditional offerings "[share] the stage with software for analytics, network function virtualization (NFV), and software defined networking (SDN)," notes Wunderlich, reiterating a Buy and upping its target by $1 to $12.
- Wunderlich also notes management highlighted opportunities for Brocade's VDX Ethernet switches in IP storage deployments. It takes this as a sign the company is bringing network management/automation features found in its Fibre Channel switches to Ethernet gear, and thereby "participate in some of the growth" being enjoyed by data center switch upstart Arista (NYSE:ANET). Arista relies heavily on management/automation features to differentiate its data center switches.
- CEO Lloyd Carney mentioned Brocade now has 50 trials with carriers for its NFV offerings (previous), and predicts will arrive in 2016. Brocade also talked up its Vyatta unit's newly-launched SDN controller, which supports the open-source OpenDaylight SDN platform. "Brocade is to OpenDaylight what Red Hat is to Linux," claimed one exec (perhaps exaggerating a bit).
- Shares managed to rally on a rough day for tech stocks.
- Brocade's investor day slides and datasheet.
Sep. 15, 2014, 11:01 AM| Comment!
Aug. 21, 2014, 5:22 PM
- Brocade (NASDAQ:BRCD) guides in its earnings slides (.pdf) for FQ4 revenue of $550M-$570M and EPS of $0.21-$0.23, in-line with a consensus of $561.3M and $0.22.
- In spite of the Fibre Channel struggles seen by adapter card/embedded switch vendors Emulex and QLogic, Brocade's SAN product revenue (60% of total) rose 1% Q/Q and 4% Y/Y in FQ3 to $325M. SAN switch and director sales respectively rose 9% and 5% Y/Y, offsetting an adjusted 11% drop in server product (adapter/embedded switch) sales.
- IP networking revenue rose 9% Q/Q and fell 1% Y/Y to $133M; the Y/Y drop is better than FQ2's 9%. Router weakness, product strategy changes, and the sale of Brocade's adapter card business to QLogic offset switch growth.
- SAN products are expected to be down 1%-2% Q/Q in FQ4, and IP networking up 6%-15%. Geopolitical issues and transitions at OEM partners (i.e. IBM) are expected to weigh on SAN revenue, while high-density router launches and federal seasonality are expected to boost IP networking.
- Gross margin rose 50 bps Q/Q and 160 bps Y/Y to 67.2%, beating guidance of 65.5%-66.5%. FQ4 GM guidance is at 66%-67%. $112M was spent on buybacks. EMC/IBM/Hitachi made up 48% of revenue vs. 47% a year ago.
- FQ3 results, PR (.pdf)
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