Brocade Communications Systems (Nasdaq:BRCD) plunged US$9.06 to $35.62 — a 52-week low — Thursday morning followingreports that the networking equipment maker expects a soft second quarter.
The drop came even as the Brocade’s first-quarter results beat expectations.
Morgan Stanley Dean Witter reportedly downgraded Brocade to outperform from strong buy, while Bank of America Securities was said tohave cut its rating to market perform from buy.
Brocade officials reportedly said on a conference call that a slowdown in theeconomy will mean little or no growth in the second quarter, compared withthe first. The company reportedly predicted full-year earnings of 60 centsper share, against previous expectations by analysts of 62 cents.
President and chief executive officerGreg Reyes said the company was “pleased” with the quarter’s results, whichhe said demonstrate Brocade’s “continued focus and execution” in providingnetworking infrastructure for storage area networks.
Revenue for the quarter ended January 27th rose to $165 million from $42.7million a year earlier, and net income advanced to $32.5 million, or 13cents per share, from $7.3 million, or 3 cents, a year earlier.
Analysts hadexpected the company to earn 12 cents per share in the latest quarter.
Brocade’s SilkWorm switches and software are used by Dell, Compaq, Network Appliance and Sun Microsystems, among others.
Brocade shares are down from a 52-week high of $133.72, set last October.