Investors reacted differently Friday to analyst upgrades of two local rivals, Aliso Viejo’s QLogic Corp. and Costa Mesa’s Emulex Corp., both makers of electronics for data storage networks.
Cannacord Adams Inc. upgraded QLogic’s shares to “hold,” up from a previous “sell” rating.
Investors reacted to the bullish view by sending QLogic’s shares up nearly 5% in early afternoon New York trading on a recent market value of about $1.6 billion.
Needham & Co. upgraded Emulex’s shares to “buy” from “hold.”
Despite the rosier view, Emulex’s shares were off 3% on a recent market value of about $720 million.
Investors likely still were reacting to Thursday’s news that Irvine-based chipmaker Broadcom Corp. walked away from a potential takeover deal after Emulex rejected Broadcom’s $912 million offer.
The company’s shares dropped 8% on the news Thursday and continued to slide on Friday.
Emulex is now in a tough spot,it has to prove to investors that it can grow to be more valuable than what Broadcom was willing to pay for it.
In a move seen helping justify its spurning of Broadcom, Emulex on Thursday offered guidance for the recently ended quarter at the high range of its earlier forecast.
For the three months through June, it expects to report quarterly revenue of $78 million to $79 million, up from $73 million to $80 million projected in April.
The company said it expects earnings before charges near the high end of its prior guidance of $826,000 to $4.1 million.
Analysts, on average are looking for profits of roughly $3 million on sales of $77 million.
Emulex is set to report results on Aug. 6.
Wall Street is looking for QLogic to report profits of about $21 million on sales of $125 million for the recently ended quarter.
QLogic and Emulex are rivals for a profitable bit of electronics that help speed up the flow of data on storage networks.
The two are competing for design wins and market share for a new technology called fibre channel over Ethernet that promises to bridge speedy, specialized data storage networks and everyday networks of servers and desktop computers.
