Storage Switch Vendor Brocade Reports Up Quarter, Down Year

Brocade Communications on Thursday reported that it lost $136.2 million for its fiscal year 2004. But it showed strong growth sequentially for its recently-ended fourth quarter.

Brocade Communications Systems Inc. on Thursday reported that it lost $136.2 million for its fiscal year 2004, with revenue of $525.3 million, down 6.5 percent from last year.

For the fourth quarter, the storage switch manufacturer earned $14.8 million on $137.8 million in revenue, officials said, compared to $1.9 million on $133.5 last quarter and $15.7 million on $153.1 million in revenue for the year ago quarter.

"Its becoming increasingly clear that SANs have a strategic and fundamentally important role to play," Chairman and CEO Greg Reyes said, in San Jose, Calif. "Overall this was a strong quarter," he said.

There are approximately 60,000 Brocade-powered storage area networks in use today, spanning more than three million ports, he said. Brocade shipped its 3,000th director-class SilkWorm 12000 switch in the fourth quarter, he said.

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Next year, Brocade will focus on lowering prices for customers, increasing product performance, delivering denser port counts in switches, and debuting blade-based and embedded switches, Reyes said.

"We believe we have a unique opportunity to make the complexity of SAN connectivity as transparent as possible," Reyes said. "We believe that 2004 is going to be the inflection point for the next phase of the evolution of the SAN market."

That will happen largely through network-based storage intelligence, technologies for which are already in developers hands, he added.

Click here for more information on Brocades Fabric Routing Services technology, which adds intelligence to storage switches and can extend the reach of SANs.

Brocade will save money and improve engineering efficiencies by buying for $106.8 million a building that it currently leases, officials said. The company expects to earn between $140 million to $145 million during the first fiscal quarter of 2005, they said.

Brocade partner Computer Network Technology Corp., which specializes in high-end optical and storage networking products, also announced earnings today.

The companys revenue was $99.8 million for the third quarter of 2003, with $237,000 in profit, compared to revenue of $96.7 million and a $25.8 million loss in the second quarter; and revenue of $55.9 million with income of $864,000 for the year ago quarter.

For the fourth quarter, CNT expects revenue between $105 million and $115 million, officials in Minneapolis said. Future products from CNT will focus on larger port counts, they said previously.

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