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4-Gig Fires Up Emulex

Emulex, which is just emerging from a major reorganization, comfortably beat analysts' revenue estimates with its second quarter results today, although the vendor's earnings felt the strain of recent acquisitions. (See Emulex Reports Earnings.)

Emulex's revenues were $121.4 million, up 10 percent on the same period last year, and above analyst estimates of $118.3 million. Despite the revenue uptick, the vendor posted a loss of 12 cents per share on a net loss of $10.1 million, compared to a gain of 19 cents on net income of $17.2 million in the same period last year.

According to execs on a conference call today, Emulex's earnings were impacted by a $22 million R&D charge associated with the vendor's recent acquisition of Sierra Logic. (See Emulex Gets Sierra Logic.) Excluding this charge and stock-based compensation fees, the vendor would have posted earnings per share of 27 cents on net income of $24.9 million. Analysts had estimated earnings of 27 cents.

Emulex CEO Jim McCluney said that strong sales of 4-Gbit/s HBAs to blade server vendors had helped push revenues up, and reiterated his desire to move the company in a new direction. "The 4 Gig adoption curve has been faster than it was for 2 Gig", he said, explaining that the technology made up 50 percent of Emulex's HBA sales. "In Q3, it could account for 60 percent."

The former Vixel CEO took over the reins of Emulex back in September, and, within less than two months, had outlined a new strategy for the firm. (See Jim McCluney, CEO, Emulex.) This has involved re-focusing the HBA vendor's energies on host server products, storage, and what it describes as "intelligent networking." (See McCluney Takes Reins, Emulex Claims HBA Spot, and Emulex 'Re-Positions'.)

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