& cplSiteName &

Brocade: Revenue Up Despite Soft Carrier Demand

Mitch Wagner
8/22/2014
50%
50%

Brocade saw decreased demand from carriers for routers, but increased revenue and profitability, according to quarterly earnings announced Thursday.

Brocade Communications Systems Inc. (Nasdaq: BRCD) announced revenue of $545 million, up 2% year-on-year and 2% quarter-to-quarter for the third quarter ending August 2. GAAP diluted earnings per share were $0.20, down from $0.26 in the year-ago-quarter and up from a loss per share of $0.03 in the second quarter of this year.

"With another solid quarter behind us, we are seeing the tangible benefits of our data center-focused strategy," Brocade CEO Lloyd Carney said in a statement. Brocade's SAN business has "resiliency and durability" and VDX switch sales are "strong" and "validate our strategic direction."

IP networking business revenue, including products and services, generated $166 million, down 1% year-over-year and up 5% sequentially. The sequential increase was primarily due to higher sales of Ethernet switching products to the US federal government and strong VDX sales to data center customers, Brocade said.

Routing product revenue decreased 19% year-over-year and 20% sequentially, primarily due to customers waiting for new products scheduled to be released in fiscal Q4 2014.

Those new products are 100Gbit/s VDX blades, which faced manufacturing delays pushing them back to the next quarter. The products are scheduled to ship in the next two or three weeks, and Brocade many see difficulty meeting demand. None of the revenue is lost; it's just been delayed, said Jason Nolet, Brocade vice president, data center and campus networking, on the company's earnings call with analysts Thursday.

Brocade anticipates IT networking will be up 6% to 15% in the next quarter, primarily driven by increased demand in the carrier market for new products.


Find out more about key developments related to the systems and technologies deployed in data centers on Light Reading's data center infrastructure channel


Carney called out Telefónica SA (NYSE: TEF) benchmarking results as a recent highlight. Tests run by Telefónica in its labs show Brocade's software-based router can achieve 80Gbit/s throughput, matching the performance levels required for carrier applications and setting a benchmark that supports NFV deployment. (See Telefónica Proves Brocade Router Performs for NFV.)

Vyatta is another bright spot for Brocade; the software networking platform has been adopted by one of the world's largest cloud service providers, and is involved in about 30 proofs-of-concept with Tier 1 providers. Brocade expects to see production implementation in early 2015, CFO Dan Faifax said. (See Brocade Weaves Software-Based Networking Strategy .)

Brocade is also aggressively pursuing NFV customers, looking to maximize market share now and worry about margins later.

Brocade traded at 9.77, up 3.83% at 7:58 pm EDT in after-hours trading.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
8/23/2014 | 10:27:22 PM
Re: It would seem
It will definatly be interesting to see How Cisco responds to them.
Steve Saunders
50%
50%
Steve Saunders,
User Rank: Blogger
8/22/2014 | 9:03:54 PM
Re: It would seem
Brocade is in an amazing position to make the telecom industry interesting for everyone - including (especially) Cisco. 

Excited to see their rocket ship take off this year and next. 

Steve 

 
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
8/22/2014 | 5:36:24 AM
It would seem
So, it would seem that going heavy on data center has paid off for them. Let's see if there virtual play does the same.
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
The more things change, the more they stay the same for Juniper's next-gen comms solutions, and that's a good thing.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
ZTE Pre5G & 5G Solutions

6|30|16   |   02:23   |   (0) comments


At 5G World London, ZTE demonstrated two types of equipment, including 128 antenna Pre5G Massive MIMO and 15GHz high-frequency base stations.
LRTV Custom TV
Energy 2020: Technology Innovation to Fuel Power Efficiency

6|30|16   |   07:21   |   (0) comments


Managing energy costs and consumption as cable operators deploy new services requires new levels of innovation from technology partners. In this video, Dave Fellows, co-founder and CTO of Layer3 TV and chief scientist of the SCTE/ISBE Energy 2020 program, discusses such ambitious objectives as achieving a second 500% increase in efficiency in outside plant ...
LRTV Custom TV
Transitioning to Service Agile Networks

6|30|16   |     |   (0) comments


Packet optical networks are transitioning from proprietary converged systems to open disaggregated platforms. This video will describe the Fujitsu 1FINITY disaggregated platform, explore how 1FINITY interoperates with the Fujitsu FLASHWAVE platform and explain how 1FINITY is designed for software control, like with Fujitsu Virtuora NC.
Women in Comms Introduction Videos
Nokia's Advancement Plan: Bring Old Skills to New Roles

6|29|16   |   7:57   |   (1) comment


Nokia's Sandy Motley advises women to change their mindsets; get aggressive about advancing their careers; develop strong, diverse support networks; and always bring forth learned skills to take on new challenges and different roles.
Between the CEOs
CEO Chat: Cisco's Yvette Kanouff

6|28|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Cisco's Yvette Kanouff for an exclusive in-depth interview.
LRTV Interviews
Comcast: Prepping Next-Gen Video Services

6|28|16   |     |   (0) comments


In this LRTV interview, Comcast's Elad Nafshi outlines where MSO stands with cloud DVR, OTT video, college and gigabit services.
LRTV Custom TV
Energy 2020: Creating Unique Standards for Cable's Unique Networks

6|28|16   |   09:30   |   (0) comments


Cable's unique network requirements require a specific set of standards for operators to increase power efficiency, according to Dan Cooper, vice president of critical infrastructure for Charter Communications and chair of the SCTE/ISBE Standards Program's Energy Management Subcommittee, and Ian Oliver, managing director of the Trenchant Group and a member of the ...
LRTV Custom TV
Masergy: 'Now Is the Time for NFV'

6|28|16   |     |   (0) comments


Hear Ray Watson, VP of Global Technology at Masergy, talk about the advantages that enterprises can leverage using Network Function Virtualization (NFV), and how Masergy takes a unique approach to solving customers' problems. For more information on Masergy, please visit www.masergy.com.
LRTV Custom TV
Masergy Leads the Charge With NFV Capabilities

6|28|16   |     |   (0) comments


Hear Tim Naramore, CTO at Masergy, talk about how focusing on solving specific customer challenges, providing self-service automation tools and being laser focused on the customer experience has enabled Masergy to be a leader in the NFV space. For more information on Masergy, please visit www.masergy.com.
LRTV Custom TV
Private Company of the Year - Affirmed Networks

6|27|16   |     |   (0) comments


At BCE 2016, Steve Saunders speaks to Hassan Ahmed about Affirmed's success.
LRTV Custom TV
Energy 2020: Growing Services, Not Consumption

6|24|16   |   07:18   |   (0) comments


Management of power requirements needs to be a key consideration as cable operators deploy new services, says Dan Cooper, vice president of critical infrastructure for Charter Communications and chair of the SCTE/ISBE Standards Program's Energy Management Subcommittee. In this video, Cooper discusses the importance of cable operators and technology partners ...
LRTV Huawei Video Resource Center
Huawei & TDC First to Launch DOCSIS 3.1 Trial in Europe

6|24|16   |     |   (0) comments


To meet the rising demands for high-speed broadband and to tackle fierce competition for 1.5 million household, TDC wanted to upgrade its network to use the latest technology. Using Huawei's DOCSIS 3.1 solution, TDC is now able to offer gigabit speeds to its customers.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
'Brexit' Vote Hits BT, Vodafone
Iain Morris, News Editor, 6/24/2016
Brexit: It's Hard to See an Upside
Ray Le Maistre, Editor-in-chief, 6/29/2016
Qualcomm Readies Lower-Band 5G Testbed
Dan Jones, Mobile Editor, 6/27/2016
Sigfox Said to Face Customer Backlash
Iain Morris, News Editor, 6/27/2016
DT Eyes FTTH Solution to German Opex Issue
Iain Morris, News Editor, 6/29/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In Silicon Valley, Steve Saunders sits down with Cisco's Yvette Kanouff for an exclusive in-depth interview.
At the BCE 2016 show in Austin, ECI Telecom CEO Darryl Edwards tells Light Reading founder and CEO about the Elastic Network concept and the company's NFV and cybersecurity developments.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.