(Updated from 7:44 p.m. EST)

Tonight,

Brocade Communications

(BRCD)

-- which makes switches and software to connect computer data networks -- is the latest company to crush the tech sector with its earnings guidance, just hours after the

Nasdaq Composite Index shrank to its lowest close in nearly two years.

Having gained 2.5% on

Instinet

in the minutes after it announced quarterly earnings that beat consensus estimates, Brocade is trading down 19.2% to $36.13 on the platform and lower 18.8% to $36.31 on

Island

ECN, as Wall Street digests the firm's disappointing outlook for the rest of the year.

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For its fiscal first quarter, Brocade earned 13 cents per share, topping Wall Street's consensus estimate by a penny and improving upon the 3 cents per share the company earned in the year-ago period. Revenue for the quarter rose to $165 million from $42.7 million in the first quarter of 1999 and $132.1 million in the previous quarter, Brocade's tenth straight quarter-over-quarter revenue increase.

But going forward, Brocade said that revenue growth in the second quarter will be "very modest," perhaps flat. For 2001, the company expects earnings of 60 cents per share, two cents lower than Wall Street's current target.

Just last week, the data storage sector was rocked by

Emulex's

(EMLX)

announcement that third-quarter revenue and earnings may suffer if order deferrals continued to pile up. Tonight, competitors in the storage market have tumbled alongside Brocade.

Emulex decreased 8.5% to $28.13 on Island,

EMC

(EMC)

lowered 6.9% to $40 on Instinet, and

QLogic

(QLGC)

plunged 13.7% to $35 on Instinet and tanked 14% to $34.88 on Island.

Elsewhere, technology issues that were hammered to new 52-week lows in the regular session got pounded further in after-hours trading. On Island,

JDS Uniphase

(JDSU)

lost 2.6% to $30.88. After the closing bell, JDS Uniphase announced that it will acquire privately held

Optical Process Automation

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, a maker of systems for manufacturing fiber-optic components. Financial terms of the deal were not disclosed, but JDSU said it would account for the acquisition as a purchase.

Meanwhile,

Sun Microsystems

(SUNW) - Get Report

lowered 3.2% to $19 on Island. Today's tech casualty, shares of Sun dropped to a new 12-month low, after

Merrill Lynch

lowered its rating for the business to neutral from accumulate, citing high server hardware inventories due in part to "used equipment from dead dot-coms."

Investors, who were hoping that the market had hit bottom today, may be disappointed when the market opens tomorrow.

On the back of Brocade's announcement this evening, the

S&P 500 futures on

Globex

were down 0.3 to 1253.6, about 5 points below

fair value and indicating a weakish open for Thursday's start. More telling, the

Nasdaq 100 Securities

were down 41 points to 2029.5, about 36 points below fair value and suggesting a messy opening for the Nasdaq tomorrow.

ADC Telecommunications Surpasses Estimates but Remains Cautious

ADC Telecommunications

(ADCT) - Get Report

has bounced off the 52-week low it hit in the regular session, after posting earnings that beat expectations but warned about the impact of the economic slowdown through 2002.

Shares of the telecom equipment maker gained 6.7% to $11 on Instinet and advanced 8.7% to $11.21 on Island, having fallen 6.3% today.

The company reported pro forma first-quarter earnings of 7 cents per share, a penny better than analysts' targets. Revenue climbed to $804 million from $594 million. On Jan. 19, ADC Telecommunications reduced its guidance for the first-quarter. Looking ahead, the firm said that it's cautious about its growth estimates for 2001 and 2002.

Portal Software Beats the Street but Warns

Portal Software

(PRSF)

posted fourth-quarter earnings that topped Wall Street's forecasts but said that it would take a cautious approach for the rest of the year. The news sent its stock down in postclose action.

The manufacturer of telecommunications billing software decreased 7.1% to $9.06 on Island.

Portal Software posted a profit of 4 cents per share, compared with consensus estimates of a 3-cent per share result. Revenue increased to $81.1 million from $39 million in the year-ago period. However, the company said it was concerned about the months ahead.

This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY) . For further information, please contact Instinet at www.instinet.com.

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TheStreet.com

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