Careers & Certifications

09:30 PM
Connect Directly
RSS
E-Mail
50%
50%

Is Emulex Slowing Down?

Despite good Q3 results, HBA vendor's shares fall 20% on prospect of lower sales growth

Emulex Corp. (NYSE: ELX), despite reporting good results for its third quarter on Thursday, saw its stock get brutally hammered today as investors responded to the host bus adapter vendor's weaker-than-expected outlook for the current quarter and beyond (see Emulex Breaks Even in Q3).

Shares of Emulex were down 20.5 percent, to $19.39, in midday trading amid a generally down market.

Also hurting the stock today were two downgrades by Wall Street analyst firms. RBC Capital Markets downgraded Emulex to Underperform from Sector Perform; and Thomas Weisel Partners changed its rating from Peer Perform to Underperform on the expectation of lower revenue growth.

"Our analysis of HBA market share gain exhaustion supports a cautious view of Emulex's future HBA revenue growth vis--vis investor expectations, and successful execution in new segments is far from certain," wrote Thomas Weisel analyst Jason Ader in a research note today.

Emulex reported revenues of $79.6 million for the quarter ended March 30, 2003, up 4 percent sequentially. It posted a net loss of $248,000, essentially breaking even, in line with Wall Street expectations. Emulex executives noted that it was the company's sixth consecutive quarter of growth.

Previous
1 of 3
Next
Comment  | 
Print  | 
More Insights
Hot Topics
5
Have You Hugged Your Sysadmin Today?
Susan Fogarty, Editor in Chief,  7/25/2014
1
IT Budgets Up In 2015, Hiring Tepid
Robert Mullins 7/25/2014
White Papers
Register for Network Computing Newsletters
Cartoon
Current Issue
Video
Slideshows
Twitter Feed