Updated from 4:43 p.m. EDT

Onetime highflier Brocade ( BRCD) offered an unusual spectacle when itreported earnings Wednesday, saying sales and profits for the quartershowed double-digit gains over last year's levels.

That's a rare sightamong tech companies these days. Rarer still, the company's presidentdeclared himself "optimistic" about the outlook for the quarter underway.

But despite the ostensibly sunny outlook, executives were tight-lippedon a conference call following the earnings release, declining to elaborateon the growth and revenue breakdown of major product lines. Also, thecompany offered guidance for only one quarter, though it had previouslyissued a forecast for two quarters.

"Nothing came out of the call that convinces me I'm wrong," said BrionD. Tanous, an analyst at RTX Securities. He's slapped a sell rating on thestock based on its steep valuation and concerns about the long-term growthrate for its core market, fabric switches. Tanous expects the stock tochange hands at $12 eighteen months from now.

Still, investors hungry for any decent news seemed placated by theupbeat guidance. In after-hours trading, shares of Brocade jumped $1.29, or8.6%, to $16.35. Earlier in the day, buoyed by a broader tech rally, itclosed up 6.2%, to $15.05.

Brocade, which makes the switches used in storage networks, said in aconference call Wednesday after the close that revenues will increase by 6%to 9% in the quarter under way, to between $160 million and $165 million.Earnings should be about 10 cents per share, unchanged from previousguidance.

The company said gross margins should remain in the 60% range, helpedalong by growing software revenues and cost-cutting efforts.

For the just-ended third quarter, Brocade posted a profit of $18.3million, up 52% from last year and 31% from the prior quarter.

The company said its net income translates to 8 cents a share. ButTanous said earnings per share would actually work out to 7 cents a share,based on the share count most analysts had probably used in their earningsmodel. The EPS given by the company reflects a lower share count than theStreet expected. "The difference had to do with the falling stock price,which lowers the amount of options in the money. Therefore the dilutedshare count goes down," he explained.

Revenue for the quarter ending in July totaled $151.2 million, slightlyabove consensus estimates of $148 million, according to ThomsonFinancial/First Call. Sales rose 30% from a year ago and 12% from lastquarter, and the company generated $34.4 million in operating cash flow.

Revenues from software comprised about 15% of total sales. In theconference call, the company chalked up its 60% gross margins both to thegrowth in software business and to cost reductions and improved supplychain efficiencies.

But despite the details on software, executives refused to comment ongrowth in the company's core business, fabric switches, or a newer market,the higher-priced director class segment. Brocade said only that it'sgained "significant traction" in the latter area, and that it wants to own40% of the director class market by the end of next quarter.

"I've been able to get product breakouts in the past. I'm a littlesurprised at how tight-lipped they were on the call," said Tanous."Everybody's anxious to know that breakout. They need to know if thetraditional market is growing or not, or whether gains are all justcoming from new product introductions, from the director class."

Indeed, after years of hype, growth expectations for storage vendorshave lately come down to earth. International Data Corp. recently cut itsgrowth forecast for fabric switch revenue, the market segment dominated byBrocade, to 12% in fiscal year 2003.

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