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NEW YORK ( TheStreet) -- Shares of Brocade Communications (BRCD - Get Report) slumped in extended trading on Monday after the San Jose, Calif.-based networking equipment maker topped analyst expectations for its fourth-quarter profit but said it could see a sequential decline in revenue for the current quarter.
The company forecast revenue of between $535 million and $550 million for its fiscal first quarter ending in January, a performance that at best would be flat with its fourth-quarter total of $550 million. The current average estimate of analysts polled by
Thomson Reuters is for revenue of $557 million in the January period. Brocade attributed the weak outlook to an expected decline in its ethernet business with the federal government in the wake of the mid-term elections and resulting "uncertainty in Congress" with appropriations legislation for fiscal 2011.
The stock was last quoted down 4.7% at $5.43, according to Nasdaq.com, on volume of roughly 2.9 million, which compares to the issue's trailing three-month daily average of 17.3 million. Based on a regular session close of $5.70, the shares are down more than 24% so far in 2010.Brocade projected non-GAAP earnings of 9 to 10 cents a share for the January period, well below Wall Street's current consensus view of 14 cents a share. For the fiscal fourth quarter ended in October, the company reported an adjusted profit of 14 cents a share on revenue of $550 million vs. analyst estimates for earnings of 13 cents a share on revenue of $536.6 million.