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QLogic Sees Good Times

Storage area networking supplier QLogic Corp. (Nasdaq: QLGC) put some justfication behind its recent runup in stock price, by reporting earnings of 19 cents per share on revenues of $81.7 million for its fiscal quarter ended Sept. 30.

The positive report, which was in line with the average expectation of analysts surveyed by Thomson Financial Securities Data/First Call, puts some beef behind QLogic's recently stampeding stock price, which has more than doubled since hitting a 52-week low of $17.21 per share at the start of October. Tuesday, QLogic shares closed at $36.08, down $1.32 on the day.

Another reason for the company's recent stock rally are rumors that Qlogic has signed, but not announced, some major new OEMs for its Fibre Channel silicon.

According to QLogic, based in Aliso Viejo, Calif., its Fibre Channel-based products led the way during the company's second fiscal quarter of 2002, accounting for 70 percent of all revenues, up from 61 percent in the previous quarter. And 12 percent of those Fibre Channel revenues came from the company's 2-Gbit/s product line (which includes host bus adapters, switches, and controller chips), a segment where it continues to beat market leader Brocade Communications Systems Inc. (Nasdaq: BRCD) to the punch (see Is Brocade's SilkWorm Losing the Thread?).

"We've seen rapid adoption [of the 2-Gbit/s products]," said QLogic CEO H.K. Desai, during a conference call Tuesday afternoon. And even in current unpredictable market conditions, QLogic felt safe enough to predict a similar (17- to 20-cents per share) earnings result for its current quarter, which ends Dec. 31.

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