McData Posts 1Q Profit

The storage specialist reported its third consecutive positive quarter today, earning $5.3M on $103.2M in revenue.

In a sign of the mildly improving enterprise storage economy, McData Corp. reported its third consecutive positive quarter today, earning $5.3 million on $103.2 million in revenue, officials said.

McDatas numbers are slightly down from the prior quarter, but are vastly better than the $17.1 million loss on $64.5 million in revenue suffered a year ago.

"Our results this quarter clearly demonstrate that we continue to capitalize on the growing market opportunities in this sector and that end-user customers rely on us as the storage networking specialist," CEO and President John Kelley said. "Building a director-class product takes more than simply a box with more ports," he said, referring to rival San Jose, Calif.-based Brocade Communications Systems Inc.s 64-port SilkWorm 12000 switch.

McData also faces a threat from SAN newcomer Cisco Systems Inc., and Kelley fears that Cisco will sell directly to customers, he said in a recent interview. However, Cisco officials, also in San Jose, denied having that plan.

EMC Corp. accounted for 61 percent of the Broomfield, Colo.-based McDatas revenue, while IBM made up 17 percent, officials said. Dell Computer Corp. and Storage Technology (StorageTek) Corp. are also now selling more McData switches, officials said.

Recent customers wins include AT&T Corp., Deere & Co., Nestlé S.A., and Verizon Communications Inc., officials said. McData anticipates revenues between $106 and $110 million for the second quarter, they said.

McData is still accessing which companies to acquire to bolster its software and protocol support, Kelley added. "We are looking at all kinds of technologies [but] the moneys not burning a hole in our pocket," he said.

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