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McData's Loss Swells

It posts a profit, but restructuring charges widen the storage networker's loss.

Updated from Sept. 6

Shares of



slipped after hours Tuesday on news that the company posted a wider second-quarter loss and issued third-quarter guidance that was on the light side of Wall Street's expectations.

McData, which makes switches and other storage networking gear, reported a loss of $25.5 million, or 18 cents a share, compared with a year-ago loss of $5.4 million, or 5 cents a share. Revenue, though, was up 68% to $165.3 million, the company announced after Tuesday's closing bell.

Excluding more than $18 million in charges related to the June acquisition of


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and other matters, the Broomfield, Colo., company earned a profit of $3.8 million, or 3 cents a share.

Analysts polled by Thomson First Call were expecting a 1-cent profit on revenue of $159.7 million in the July quarter.

The quarter included two months of CNT's results. Given the typical sales pattern of the acquired company, McData likely reaped 80% of the smaller company's sales in the quarter.

Looking to the third quarter, McData said to expect revenue ranging from $174 million to $182 million and a pro forma profit of 2 cents to 4 cents a share. Wall Street was looking for a profit of 4 cents a share on revenue of $181.5 million.

Guidance for the fourth quarter and the fiscal year remain unchanged.

In after-hours trading, shares were off 21 cents, or nearly 4%, to $5.08, after losing 19 cents during the regular session.

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