Brocade Posts a Loss for First Quarter

The top storage switch maker saw a loss of $6.9M for the quarter, compared with a profit of $15.7M last quarter.

Top storage switch maker Brocade Communications Systems Inc. Wednesday announced a loss of $6.9 million for the first quarter 2003.

In the shaky enterprise storage sector, Brocades loss compares to a profit of $15.7 million and a restructuring last quarter, and a profit of $11.7 million for the same year-ago period. Brocade earned $123.1 million in revenue for the first quarter, compared to $153.1 million in the prior quarter, and also $123.1 million a year ago.

The earnings come in spite of positive product and strategy news. Brocade sold its top product, the SilkWorm 12000, to 54 new accounts in the quarter, said Greg Reyes, the companys chairman and CEO. Software revenue was up 18 percent, he said.

Meanwhile, Brocade last month completed its $175 acquisition of startup Rhapsody Networks and announced a software licensing deal with Hewlett-Packard Co.

"This was a quarter of continued execution for Brocade. We met our business optimization goals, reducing operating expenses by 12 percent quarter over quarter, and continued to expand our leadership position," Reyes said, in a prepared statement. "We are positioned well for renewed growth in 2003," he said.

Brocade has cash and investments of $893 million, officials said.