Brocade Surprises to Upside

Updated from Aug. 13

Brocade(BRCD Quote) bucked the week's pattern of terrible tech news by saying third-quarter earnings would be slightly better than expected.

The company was rewarded with a premarket bounce. In recent trading, shares were up 46 cents, or 11.4%, to $4.50. They lost 14 cents, or 3%, to close at $4.04 a share Thursday.

The enterprise storage vendor expects to earn 6 cents to 7 cents a share on sales of $149.5 million to $150.5 million. Excluding a pretax gain of $3.5 million, the company will earn a pro forma profit of 5 cents to 6 cents a share, compared with Wall Street's expectations of a 4-cent profit. Revenue will be in line with expectations.

"I am pleased to announce revenue that is in line with our previous outlook and better-than-expected EPS," said Greg Reyes, Brocade chairman and CEO. "Given the unusually large number of pre-announcements by storage-related companies with lower than expected financial results, we believe that it is important to provide our preliminary results so the market can assess Brocade's performance and competitive position accurately."

Brocade will announce complete third-quarter results after the close of the market on Wednesday.