This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Brocade Communications Systems Management Discusses Q2 2012 Results - Earnings Call Transcript

Our Q2 revenue was slightly down year-over-year, primarily due to the divestiture of the SBS business unit in late 2011. However, the increased focus on our core businesses, as well as emerging target markets helped improve gross margins and profitability.

An important part of our growth strategy is to focus on investments in key target markets, selecting those areas where we can leverage our technology and market leadership. Over the past 2 years, we have made strategic investments that have reduced profitability. But we do believe that the aggregate return over time will be significant to our business. We're now at an inflection point where we expect to grow profits faster than revenue by driving efficiencies into our business.

To date, this strategy includes the introduction of new highly differentiated products with improved cost structures, the divestiture of a low-margin business unit, the development of our channels for efficient sales coverage and the prioritization of resources and investment dollars into high-growth markets.

We've been aggressively reducing our term loan and opportunistically repurchasing shares, which returns cash to our shareholders. The Board of Directors recently increased our authorization for stock repurchase plan, which was originally approved in 2004. To date, we repurchased more than $650 million or 108 million shares and had approximately $124 million remaining under the plan. The refreshed plan increases our authorization by another $500 million to approximately $624 million. To fund the updated program, we plan to utilize cash from operations, and we may consider monetizing our San Jose campus depending on the market conditions.

Now on to the quarter. One of the highlights in Q2 was the strength of our Storage business, which generated $400 million in total revenue, representing a 3% increase year-over-year in what is typically a seasonally soft quarter. A key driver was our 16-gig SAN portfolio, which accounted for 23% of Director and Switch Storage product sales in Q2 and helped us gain market share.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs