Brocade 4Q Profit Drops On Costs; Backs Guidance

SAN JOSE, Calif. (AP) — Networking gear maker Brocade Communications Systems Inc. said Monday its fourth-quarter profit fell 6 percent as hefty costs offset a surge in revenue, but reiterated its guidance for fiscal 2010.

Net income in the three months ended Oct. 31 fell to $33.6 million, or 7 cents per share, from $35.6 million, or 9 cents per share, a year ago. The company said the cost of goods sold ballooned to $250.9 million from $153.4 million, while research and development, sales and markeing and legal fees also jumped year-over-year.

Still, adjusted to exclude one-time items such as litigation fees and restructuring costs, earnings would have totaled 15 cents per share in the latest period, beating the expectations of analysts polled by Thomson Reuters by 2 cents.

Revenue rose 31 percent to $521.8 million on strong growth in product sales helped by the company's Foundry Networks acquisition. The figures just topped analysts' $521.1 million estimate.

CEO Mike Klayko said in a statement that Brocade is benefitting from "the relentless growth in data and network traffic, which continues to remain robust regardless of economic cycles."

For the full year, Brocade lost $76.5 million, or 19 cents per share, reversing a year-earlier profit, though revenue grew 33 percent to $1.95 billion.