Updated from April 28
reported an increase in fourth-quarter earnings and revenue after the close Wednesday, but as expected, the increase was well below the company's original targets.
Investors apparently saw the report as a signal that the stock will recover from its recent slide; shares were recently up $1.37, or 5%, to $28.06.
The storage vendor reported a profit of $32.9 million, or 34 cents a share, compared with a year-ago profit of $29.9 million, or 31 cents a share, according to generally accepted accounting principles. Revenue rose 6% to $128.3 million. Excluding charges, the company earned a pro forma profit of 36 cents per share. Those results matched Wall Street consensus, according to Thomson First Call.
Until the company
warned in late March, analysts had expected earnings of 38 cents a share on revenue of $140 million.
Most notably on the plus side, the company expanded gross margins, despite a sequential decline in revenue, to 69.6% from 68.7% in the prior quarter and "well ahead of our 68.5% expectation," said A.G. Edwards analyst David Wong. Key drivers were favorable manufacturing efficiencies, as well as favorable product and technology mix (fibre channel vs. the older and now fading SCSI technology), he added. (A.G. Edwards is seeking banking business with QLogic.)
Fibre channel revenue was $103 million in the quarter, representing 80% of total revenue.
The company now expects revenue to be flat to up 3% sequentially during the June 2004 (fiscal first) quarter. This equates to revenue in the range of $128 million to $132 million. Non-GAAP EPS is expected to be between 34 cents and 37 cents a share.
QLogic's core business is HBAs, or host bus adapters, critical components in storage networks used by large businesses.