Updated from Jan. 20Emulex ( ELX) bested its own recently raised guidance for the second quarter on Thursday, but revenue was lower than in the same period last year. Shares added 25 cents, or 1.6%, to $16.40 Friday morning. The storage gearmaker reported a profit of $14.2 million, or 16 cents a share, compared with $3.6 million, or 4 cents a share, in the same quarter of 2003, due largely to lower costs. Pro forma earnings slipped 3 cents to 24 cents a share, but were still well ahead of the company's original guidance of 13 cents to 15 cents. Revenue was $91.7 million, compared with $94.4 million a year ago, but also way ahead of the $81 million to $85 million expected originally. Gross Margins were flat at 63%. Looking ahead to third-quarter results, the company told investors to expect pro forma earnings ranging from 18 cents to 20 cents a share and revenue of $91 million to $93 million. Analysts polled by Thomson First Call were expecting an 18-cent profit on sales of $88.7 million. Chief Financial Officer Michael J. Rockenbach said that the company plans to push hard for growth in market share and the top line. "We're willing to take lower gross margins," he said in an interview. Although prices will come down, Rockenbach said the company expects to win market share by pushing its new generation of faster storage products into the market before the competition. But the beefier top line won't come "in the next 90 or 180 days," he said. Meanwhile, R&D costs will likely stay flat, but the company will spend more on sales and marketing. The results were not a major surprise. Emulex preannounced better-than-expected results for the second quarter in early January, and QLogic ( QLGC) the company's major rival in the host bus adapter market, followed with the news
At the time the company raised its guidance, Emulex said it expected to post pro forma earnings of 19 cents to 20 cents a share in the December quarter, on revenue of $90 million to $91 million. Shares of Emulex were up 1.4%, to $16.30 a share in after-hours trading. The stock closed the regular session off 7 cents to $16.08. Host bus adapters, commonly called HBAs, connect devices on a storage network to the server, making it easier to store and retrieve large amounts of business data.