Updated from 9:28 a.m. EDTA profit warning from storage hardware lynchpin Emulex ( ELX) and a handful of other companies involved in behind-the-scenes technology processes had several sectors of the Nasdaq struggling Thursday. Costa Mesa, Calif.-based Emulex warned results will sharply trail estimates over two quarters because of weak demand from customers who resell its storage adapters, sophisticated devices that connect storage arrays like databases to computer servers. The company also cited a falloff in sales in a key line of hardware it received when it bought adapter company Vixel in October 2003. The warning sunk Emulex and stole the stage from QLogic ( QLGC), which tried to defend itself by affirming its own earnings forecast. Brocade ( BRCD) also fell. Before one-time items, Emulex expects to earn 18 cents a share on revenue of $95 million to $96 million in the three months ended June 30. Analysts surveyed by Thomson First Call were forecasting earnings of 25 cents a share on revenue of $101.3 million. Citing a product transition by a major customer, the company said revenue in the current first quarter will be $75 million to $76 million, well below the consensus estimate for $104.5 million. The stock was downgraded by J.P. Morgan to neutral from overweight on grounds the big first-quarter shortfall bodes slower growth for the host adapter market as a whole. The brokerage said changing procurement patterns at Hewlett-Packard ( HPQ) and Sun Microsystems ( SUNW) were probably to blame. Emulex and QLogic derive most of their revenue from the resale of products packaged into larger systems by server and storage companies like EMC ( EMC), Hewlett-Packard ( HPQ) and Unisys ( UIS). "Although demand or sell-through associated with three out of our top four OEMs grew sequentially, tepid demand from two OEMs during the end of our fourth quarter resulted in lower-than-expected revenue," Emulex said. "Revenue from InSpeed storage switching products grew year to year and contributed more than 10% of quarterly revenue, but declined sequentially from the strong sequential growth seen in the third quarter." Regarding the current quarter, Emulex said it expects one of its OEMs to switch to a hub-based inventory model, a development that has led the company to reduce channel inventories. "Although the company indicated the change to a hub-based model will not affect end-user demand for Emulex products, the interim financial impact of this transition is expected to be a reduction in first-quarter fiscal 2005 revenue by as much as $10 million below actual demand levels as stocking inventory of Emulex host bus adaptors is sold." Emulex's stock was recently down $1.80, or 12.7%, to $12.51. Shares of rival host bus adaptor maker QLogic were off 86 cents, or 3.2%, to $26.59. QLogic said in a release issued about two hours after Emulex's that first-quarter earnings will be between 34 cents and 37 cents a share. Analysts were forecasting earnings of 36 cents a share, according to Thomson First Call. Brocade was recently down 13 cents, or 2.2%, to $5.98. Elsewhere, shares of integration-software maker Iona ( IONA) were in similar trouble after the company predicted a wider-than-expected loss resulting from slow uptake of some new technologies. Iona forecast a loss of 4 cents to 6 cents a share on revenue of $15 million to $15.5 million. Analysts had been looking for a loss of 2 cents a share on revenue of $18.3 million. The stock was down 40 cents, or 10%, to $3.68. Contract chip assembler Amkor Technology ( AMKR) plunged after saying limited sales of high-margin products would depress earnings in its second quarter. The company expects to earn just 6 cents a share in the three months ended June 30, compared with previous guidance for as much as 22 cents a share. The stock fell $2.24, or 27%, to $5.94.