Updated from 10:20 a.m. EDT

Emulex ( ELX) boosted third-quarter revenue by 24% and moved to a profit from a year-ago loss, the storage hardware maker reported after the bell Thursday.

But the company's guidance for the fourth quarter -- earnings of up to 25 cents a share on sales of $100 million to $103 million -- was below Wall Street's expectations of 26 cents and $105.62 million. Shares were recently off $2.04, or 10.4%, to $17.55.

In the fiscal third quarter ending March 28, the Costa Mesa, Calif., company earned $14.5 million, or 17 cents a share, compared with a loss of $248,000, or break-even on an EPS basis, a year ago, according to generally accepted accounting principles. Revenue was $99.1 million, compared with $79.6 million in the corresponding quarter last year.

Excluding charges, the company made a profit of 25 cents.

Analysts polled by Thomson First Call were expecting a third-quarter profit of 25 cents on sales of $100.99 million.

In a conference call after the announcement, the company attributed top-line weakness to a seasonally soft quarter, an explanation that did not satisfy some analysts. "Since when?" was Lazard Feres analyst Cliff Su's rather tart response. "We find this explanation somewhat troubling considering that this marked the first time since the end of 2000 that revenue fell sequentially," he wrote. (Lazard has done investment banking for Emulex.)

However, gross margins in the quarter increased sequentially to 63.9% from 63.3%. It appears the now-completed acquisition of Vixel is paying off, and may make up some of the gap caused by the softening in Emulex's core business.

Clay Sumner of Legg Mason said there was, in fact, some truth to the claim of seasonality. He noted that some large customers -- such as Dell ( DELL), Hewlett-Packard ( HPQ) and Network Appliance ( NET) -- have buying patterns that lag behind other typical Emulex customes by about a month.

So as those large companies become a larger part of the Emulex customer base, Emulex experiences altered seasonality. Sumner expects buying spikes by those companies in April, July, October and December.

"Clearly, these were not inspiring results, but after digging into the numbers, we are convinced that the situation is not nearly as ominous as we first suspected," he said. (Legg Mason does not have a current investment-banking relationship with Emulex.)

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