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Brocade Cautious About Growth

Brocade Communications Systems Inc. (Nasdaq: BRCD) today confirmed it met its revenue forecast and beat income expectation last quarter, but executives are cautious about growth for the current quarter.

The results were in line with Brocades announcement last week (see Brocade Announces Prelims). It reported revenue of $150 million, up three percent from last quarter and 12 percent from last year. Brocade also reported net income of $15.2 million and earnings per share of $0.06 per share, up from $0.03 EPS last quarter and $0.01 last year. Brocade matched the First Call revenue consensus and beat EPS forecast by $0.01.

CEO Greg Reyes's guidance didn't call for much of an increase the current quarter, as he forecast $150 million to $156 million in revenue. That would result in flat or slight growth over last quarter.

Reyes said the caution is due to a delay in the expected growth of technology spending, and because Brocade is in a new product cycle.

"All of our new products are in the market," he said in a call with analysts. "It takes a couple of quarters to hit the sweet spot in any new product cycle."

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