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Emulex Earnings Decline

It beats estimates on an adjusted basis.
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posted third-quarter earnings Thursday that were down 35% from a year ago, as sales fell and operating expenses rose.

The company earned $11.6 million, or 13 cents a share, in the quarter, compared with $17.8 million, or 20 cents a share, a year ago. Adjusted earnings totaled 22 cents a share in the latest quarter, a penny better than the consensus estimate compiled by Thomson First Call.

Sales were $89.3 million in the quarter, down from $102.6 million. Analysts had been predicting sales of $92.1 million, according to Thomson First Call. According to Emulex, the quarter's sales were hurt by the deferral into the fiscal fourth quarter of scheduled launches by resellers of certain next-generation server and storage platforms.

"We believe that end-user demand paused while customers waited for availability of OEM products certified for use with 4 Gb/s Fibre Channel HBAs," the company said. "We experienced strong growth of more than 100% sequentially in 4 Gb/s HBAs with OEM platforms that were early adopters of 4 Gb/s technology, while demand for older generation 2 Gb/s HBAs fell, showing particular softness within OEM product sectors where 4 Gb/s HBA availability is imminent."

For the current fourth quarter ending July 2, Emulex expect to earn 20 cents or 21 cents a share, including 3 cents a share of dilution from its acquisition of Aarohi. It pegged revenue at $96 million to $99 million. Analysts, on average, were forecasting earnings of 23 cents a share on revenue of $98 million.

The stock closed at $17.62 Thursday. In after-hours trading, it rose 20 cents, or 1.2%, to $17.82.