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Emulex Breaks Through

Emulex Corp. (NYSE: ELX) expects to shatter its revenue forecast for the second straight quarter, bringing the HBA vendor back from a two-quarter 2004 slump.

Emulex announced Thursday night that it raised its revenue forecast for last quarter to approximately $101 million to $102 million, with anticipated earnings per share of $0.23 or $0.24 (see Emulex Announces Prelim Results).

The companys previous guidance was for $91 million to $93 million in revenue and EPS of $0.18 to $0.20 (see Emulex Posts Q2). Emulex will announce its earnings April 21.

Financial analysts see Emulex’s strong quarter as a good sign for the industry because it is unusual for storage companies to beat expectations by a wide margin in the first quarter of the year. Emulex is now on track for a sequential revenue increase of more than 10 percent. The first quarter of the year is usually weak, following a spending surge in the fourth quarter as businesses flush their budgets.

Wall Street seems pleased. “Emulex's story has improved considerably. For the company to grow its Fibre Channel solutions by more than 10 percent sequentially following the 30 percent sequential growth selling HBAs in the December quarter is quite impressive,” analyst Shebly Seyrafi of Merrill Lynch & Co. Inc. wrote today in a research note.

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