Shares of Emulex Corp., a Costa Mesa-based maker of electronics for data storage networks, jumped Thursday after the company reported results for the September quarter that beat Wall Street’s expectations.
Investors sent shares up more than 7% in afterhours trading on a recent market value of about $665 million.
Emulex reported revenue of $112 million, down 5% from the same period a year earlier and beating analysts’ expected $110 million in sales.
Excluding charges for stock compensation, severance pay and write-downs on assets, Emulex posted profits of $18 million, down 19% from the year-ago quarter and beating analysts’ expectation of $15 million in profits.
Including the charges, the company had profits of $7 million, down 30% from the same period a year earlier.
“Over the past six months we have been streamlining our organization and better aligning our investments for both near and long term growth opportunities. In fiscal 2009, we believe the expansion of our globalization initiatives, combined with focused research and development investment and expense management, will position Emulex for success through these uncertain times,” Chief Executive Jim McCluney said.
For the current quarter, Emulex is expecting revenues of $111 million to $116 million, short of analysts’ expected $119 million in sales.
The company is looking for profits of about $17 million to $20 million. Wall Street is expecting about $20 million in profits.
Ahead of the earnings announcement, Emulex was upgraded by RBC Capital Markets Corp. analyst Thomas Curlin.
Curlin upgraded the stock to “outperform” from “sector perform” and kept his price target on the stock at $13 a share. Emulex was trading at about $8 late Thursday.
“We believe the shares offer an attractive relative valuation and should provide relative earnings performance versus our coverage list in a tough macroeconomic context,” Curlin said in a research note.
He noted that Emulex is the only company within its category under RBC’s coverage that got an “outperform” rating.
