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Brocade Hit With Q2 Loss

Hit with acquisition-related charges and slipping revenues, Brocade Communications Systems Inc. (Nasdaq: BRCD) ended its second quarter with a huge loss, in contrast to a year-ago profit (See Brocade Posts Q2 Loss).

The company posted a second-quarter net loss of $146 million, or 57 cents a share, largely because of about $135 million in charges related to the acquisition of Rhapsody Networks. Revenue for the quarter also slipped, to $130.9 million, compared with $135 million for the same quarter last year (see Brocade Scoops Up Rhapsody).

The results were in line with Brocades previous guidance and analysts' expectations. On its first-quarter earnings call in February, Brocade said it expected the quarter to fall between $128 million and $133 million (see Brocade Puts Up Q1 Loss).

"Unfortunately, this wasn’t a surprise at any level," says A.G. Edwards analyst Shebly Seyrafi. "This was very much as predicted."

For the current quarter, Brocade expects revenues in the range of $131 million to $137 million, and earnings of 1 cent per share, executives said on a conference call with investors today.

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