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Brocade Triples Profit

The storage-switch maker beats the Street on both lines in its first quarter; shares rise more than 6%.

Updated from 4:44 p.m. EST

Brocade Communications


tripled its net income in the first quarter and increased sales by 32% year over year, besting Wall Street's top- and bottom-line expectations.

Brocade posted a profit of $33.3 million, or 12 cents a share, compared with $9.7 million, or 4 cents a share, in the same quarter last year.

Revenue was $224.2 million, up from $170.1 million last year, the storage-switch maker reported after Monday's closing bell.

Excluding various items, the San Jose, Calif., company earned 17 cents a share. Analysts polled by Thomson First Call were looking for an EPS of 13 cents on sales of $214.8 million.

On that basis, operating margin was 26.1%, compared with 21.5% in the preceding quarter and 17.3% a year ago.

Brocade completed the acquisition of rival McData in late January; the acquired company's results were not included in Brocade's first quarter, but will be part of the second quarter.

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Brocade has run up more than 60% since bottoming in mid-August. In after-hours trading, shares were recently up 54 cents, or 6.2%, to $9.23.

Looking to the seasonally slower second quarter, Brocade expects to turn a non-GAAP profit of 8 cents to 10 cents a share on sales ranging from $335 million to $350 million.

Wall Street was looking for an 8-cent profit on sales of $336.5 million.

Including items, Brocade's per-share profit will likely range from break-even to 2 cents, the company said.

Separately, Brocade said its board has authorized $200 million for stock repurchases, adding to the $52.7 million remaining under a previously announced $100 million buyback.

Two former Brocade executives are among the handful of executives who have been charged with fraud by federal prosecutors. Stephanie Jensen, the former vice president for human resources and Gregory Reyes, who was Brocade's chief executive, pleaded not guilty in August.

Brocade and the

Securities and Exchange Commission

are still investigating the company's past options practices; in the first quarter, that investigation cost Brocade $5.2 million.