Brocade Grows Revenue, Swings to Loss

Brocade busts out a first-quarter loss in the aftermath of its Foundry Networks acquisition.
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Storage specialist

Brocade

(BRCD)

, which is just starting to digest its massive

Foundry Networks

(FDRY)

acquisition, swung to a loss in its first quarter, despite enjoying strong revenue growth.

The company, which recently

completed

its $2.6 billion purchase of switch specialist Foundry Networks, posted a loss of $26 million, or 7 cents a share, compared to profit of $35.6 million and 9 cents a share in the same period last year.

Brocade's revenue, however, grew 24% over the same period to $431.6 million, although this was below analysts' estimate of $441.7 million.

Excluding charges, Brocade earned 15 cents a share on net income of $63.6 million, down from 20 cents a share and $75.8 million a share in the year-ago quarter, but above analysts' estimate of 13 cents.

The firm's operating margin was 26.1%, roughly the same as the first quarter of 2008.

Brocade's results, which came out after market close, pushed the firm's shares up 2 cents, or 0.6%, to $3.40 in extended trading.

"Brocade achieved another strong quarter in terms of revenues and better-than expected operating margins," said Brocade CEO Michael Klayko in a statement. "These results were fueled by a healthy mix of products and services, including IP networking solutions from our recently integrated Foundry business."

The San Jose, Calif.-based firm, which competes with

Emulex

(ELX)

,

Cisco

(CSCO) - Get Report

and

QLogic

(QLGC)

, has now finalized its roadmap for combined Brocade/Foundry products.

"We have been successful to date integrating the Foundry team and have begun to re-organize the combined company in order to more quickly and proactively take advantage of the opportunities afforded us," said Klayko.

Brocade began integrating Foundry Networks in late December, and the vast majority of Foundry's employees and key members of the company's executive team are still in place, according to the company's statement.