Brocade reported better than expected financial results for last quarter, and its executives expressed optimism that its pending acquisition of rival McData will proceed as planned.
Brocade's $208.8 million in revenues and $0.14 earnings per share (EPS) exceeded its revenue guidance of $200 million to $205 million and EPS guidance of $0.10 to $0.12. The consensus of Wall Street analysts polled by Thomson Financial expected $203.5 million and $0.12.
With a revenue increase of 44 percent over last year and 11 percent from the previous quarter, Brocade clearly took market share from Cisco and McData last quarter. Cisco's storage revenues increased in the mid-teens last quarter while McData's preliminary report shows revenue shrank since last year. (See Cisco's Storage Slows and McData Finishes With a Flourish.)
Brocade announced plans to acquire McData for $713 million in August, pending approval from the Federal Trade Commission (FTC) that it clears antitrust regulations. (See Brocade Bags McData For $713M.)
CFO Richard Deranleau said on a conference call Tuesday with analysts he foresees no problem from the FTC, although the agency has already made two requests for information. Deranleau said he expects the deal to close as soon as January.
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