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Emulex Hits the Deck

Emulex Corp. (NYSE: ELX) ended speculation about its weak quarter by making it official: The HBA vendor admits it will miss its previous forecast by as much as $18 million for the fourth quarter just finished (see Emulex Cuts Earnings Forecast and Sour Outlook for Emulex).

After market close Wednesday, Emulex said it expects to report revenues between $85 million and $86 million, compared to previous guidance between $100 million and $103 million. It expects earnings of around $0.18 per share compared to previous guidance of up to $0.25 EPS. Emulex will see huge sequential declines from last quarters $99 million in revenue and $0.25 EPS.

Prospects for Emulex don’t look much better for the current quarter. The company expects revenue of around $75 million to $76 million for the quarter that ends in September, which would be down from $84.6 million from the same quarter last year.

In a statement, Emulex CEO Paul Folino said “tepid demand from two OEMs during the end of our fourth quarter resulted in lower than expected revenue.” Emulex’s fourth quarter ended Wednesday.

Hewlett-Packard Co. (NYSE: HPQ), which along with EMC Corp. (NYSE: EMC)
and IBM Corp. (NYSE: IBM)
is one of Emulex’s largest OEMs, is widely regarded as the source of "tepid demand." HP has had a soft quarter, by many reports, and is considered the OEM that caused tape library company Overland Storage Inc. (Nasdaq: OVRL) to slash its guidance Wednesday (see Overland Guides Under).

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