Big Cost Savings Expected
Big cost savings expected A Brocade spokesperson said the purchase, which is expected to close next quarter, would help it gain scale and accelerate growth, leading to yearly cost savings of $100 million by the fourth quarter.Brocade has forecast third-quarter net revenue of $188 million to $189 million and net earnings per share of 8 cents to 9 cents.McData reported that it expects Q2 earnings per share to range from a loss of 2 cents per share to break even on revenue of $150 million to $152 millionfar below the companys previous estimate of $170 million to $180 million. In its most recent financials, McData blamed weak sales in North America as well as at its unit that handles Europe and the Middle East. It also cited lower demand for some of its top-of-the-line products. Brocade has been in the news recently due to an ongoing SEC investigation involving fraud charges. The SEC last month filed civil fraud charges against the former CEO, Gregory Reyes, and two other officials of the company. Reyes and his colleagues face criminal fraud charges that carry a maximum penalty of 20 years in prison and $5 million in fines. Reyes attorney, Richard Marmaro, has said his client is innocent. Check out eWEEK.coms for the latest news, reviews and analysis on enterprise and small business storage hardware and software.