Storage specialist

Brocade

(BRCD)

is expected to offer upbeat news to investors when it reports its second-quarter results before market opens Thursday.

The company's stock has risen steadily in the past few months, boosted by changes in the competitive landscape, and is trading around $6.31, more than three times its March low. Analysts surveyed by Thomson Financial are expecting Brocade to report second-quarter revenue of $476.4 million and earnings of 9 cents a share.

"We expect solid upside in second half of fiscal year 2009, which ends in October," wrote Min Park, an analyst at Goldman Sachs, in a recent research note.

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For the fiscal third quarter that ends in July, Park is predicting revenue of $490 million and earnings of 12 cents a share. "Any positive update on asset sales/leaseback should help quiet concerns about the company's leverage and enable its multiple to move higher," he added.

Brocade may also be gaining market share from

Cisco

(CSCO) - Get Report

, according to Kaushik Roy, an analyst at Wedbush Morgan.

"Part of the year-over-year revenue decline of Cisco's storage switching revenues was due to a softer demand environment, but we estimate that the larger portion of the year-over-year decline was due to market share loss to Brocade," he wrote in a research report.

Networking giant Cisco saw its storage revenue tumble 45% year-over-year when it reported its recent third-quarter results.

Brocade's long-term prospects have also been boosted by

Cisco's

decision to

enter

the server market with the launch of its

Unified Computing System

.

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 23796467001; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

The UCS launch sent shockwaves through the sector and prompted a

war of words

with Cisco's long-time partner

Hewlett-Packard

(HPQ) - Get Report

.

"Server vendors such as H-P and

IBM

(IBM) - Get Report

are moving away from Cisco to Brocade and that shouldhelp Brocade continue to gain significant market share in the next 12-18 months," wrote Roy, maintaining his "buy" rating and $7 price target on Brocade.

Brocade has already strengthened its

partnership

with IBM, clinching a new distribution

deal

for Internet routers and switches.

A key risk to Brocade, however, remains its integration of switch specialist

Foundry Networks

. Despite enjoying strong revenue growth, Brocade swung to a

loss

in its recent

first-quarter

results, thanks largely to charges associated with the Foundry acquisition.

There are signs, however, that Brocade is successfully absorbing Foundry.

"We believe Brocade is close to completing the Foundry integration and the sales teams were integrated at the beginning of the current quarter," wrote Munjal Shah, an analyst at Jefferies, in a recent note. "We believe Brocade remains focused on overall profitability and we maintain our fiscal year 2009 gross margin and operating margin targets of 58.4% and 20%, respectively."