Updated from 4:53 p.m. EST
, which preannounced stronger-than-expected third-quarter results earlier this month, announced final numbers Wednesday that still exceeded recently raised analyst estimates.
The company also said fourth-quarter results should come in higher than analysts are currently projecting.
The Aliso Viejo, Calif.-based storage equipment vendor earned a profit of $43.4 million, or 46 cents per share, in the quarter, which ended Dec. 26. That was up from $35 million, or 36 cents per share, a year ago.
Excluding merger-related stock compensation charges and legal settlements from last year only, third-quarter income totaled $45.1 million, or 48 cents per share, up from non-GAAP income of $37.9 million, or 39 cents a share, in the year-earlier period. That beat by a penny the latest consensus estimate among analysts, who raised their numbers considerably after the company's preannouncement Jan. 11, according to Thomson First Call.
On a GAAP basis, analysts were expecting earnings of 45 cents a share.
Revenue in the December quarter was $150.3 million, up 10% from the $137.1 million reported in the comparable quarter last year. That beat recently raised analysts' estimates calling for third-quarter sales of $149.4 million. QLogic cited double-digit sequential growth for switches and host bus adapters as the primary source of the revenue growth.
While QLogic's numbers beat analyst estimates, they hit the high end of the company's updated guidance provided earlier this month. At that time, QLogic said it expected third-quarter revenue to range from $148 million to $150 million, up from previous guidance of $136 million to $143 million. The company said GAAP net income would be approximately 44 cents to 46 cents a share, up from an earlier forecast of 36 cents to 39 cents a share. On a non-GAAP basis, QLogic upped its forecast to a range of 46 cents to 48 cents a share, from an earlier range of 38 cents to 41 cents a share.
Also consistent with the company's forecast from more than a week ago, gross margins in the third quarter came in at 69.8%, largely in line with the second quarter's 69.4% gross margin.
Looking ahead to the fourth quarter, CFO Tony Massetti said in a post-close conference call that the company expects to register a 1% to 5% sequential increase in revenue. That would translate to a revenue range of about $151.8 million to $157.8 million, exceeding the current consensus estimate of $147.7 million.
Massetti said he expects a fourth-quarter gross margin of 68% to 69%, with non-GAAP earnings per share of 45 cents to 48 cents a share and GAAP earnings coming in about a penny lower. That also would be higher than the current consensus estimate of 44 cents a share.
QLogic, which was criticized last quarter for not buying back more stock, said it has spent $80 million in fiscal 2005 as part of its stock repurchase program. The company closed the third quarter with $768 million in cash and short-term investments.
Like other storage stocks, QLogic has run up strongly since mid-August, appreciating 76.8% vs. a 20.2% gain in the
. QLogic's run-up includes a 13.5% jump since Jan. 10, a day before the company preannounced its upside surprise.
Shares of QLogic declined 49 cents, or 1.3%, to $36.30 in recent after-hours trading; shares closed down $1.51, or 3.9%, at $36.79.