Emulex Beats Q2 Expectations, Shares Down on Sales, Profit TargetsFriday, August 10, 2012
Costa Mesa networking electronics maker Emulex Corp. on Thursday reported financial results in the June quarter that beat Wall Street expectations.
The company posted revenue of $129 million, up 5% from a year earlier.
Analysts on average had forecast sales of about $127 million.
Adjusted profits came in at $23.2 million, beating consensus estimates of $19 million.
For its fiscal year ending June 30, Emulex reported record revenue of $501.8 million, up 11% from a year ago.
This is the second straight year Emulex has seen double digit revenue growth.
Adjusted profit topped $76.1 million, up 62%.
Emulex designs and makes networking equipment that connects storage, servers and data centers. It is among a burgeoning group of networking-equipment makers competing in the emerging 10-gigabit Ethernet connection market for data centers.
That segment saw a 70% sales jump year over year.
The company’s Storage Connectivity Products segment, led the gains in the recently ended quarter. That segment was up 58% to $32.7 million.
Network Connectivity Products, the company’s largest business line which includes 10-gigabit devices, saw sales slide 7% to about $88 million in the June quarter.
Emulex provided guidance for the current quarter.
It projects sales in the September quarter of $118 to $122 million, below Wall Street expectations.
Adjusted profits are projected to be in the $12.1 million to $13.8 million range.
Analysts are forecasting adjusted profits of $18.2 million.
The company also said it will pay $58 million in the current quarter as a partial patent litigation settlement.
It took a $38.5 million charge in the recently ended quarter.
Emulex in early July announced it will pay Irvine-based chipmaker Broadcom Corp. $58 million in release and licensing fees related to a long-running patent dispute regarding fibre-channel and Ethernet technology.
The resolution cleared up one of three pending patent lawsuits between the companies.
For years it has battled Aliso Viejo-based rival QLogic Corp., the market share leader in fibre-channel adapters and another 10-gigabit player.
Emulex spun off QLogic in the early 1990s.
Investors may have seized upon the disappointing guidance, sending Emulex shares down 2.6% in after hours trading to a market value of about $788 million after Thursday's earnings report. Shares were down 8.45% in midday trading Friday.