Tomahawk, WI 8/16/2013 (Basicsmedia) – Brocade Communications Systems, Inc. (NASDAQ:BRCD) supplies networking equipment, including both the hardware and software to its multitude of clients. These products and services are sold all over the world by BRCD to its growing list of clients, which include some of the most well known telecommunication firms, service providers and global businesses. End user clients are also not left behind since they are catered for by the company’s legion of distributors spread worldwide. Here, we look at why the company seems to be on a solid footing financially.


Chart shows BRCD’s steady financial performance from 2012 to 2012.

Image is from

Latest BRCD Q3 2013 Financial Performance

When BRCD recently announced its Q3 2013 financial results, one thing which emerged was that it had exceeded the estimates made by analysts and industry experts. Moreover, the company reported that there had been a surge in demand for its products worldwide. In addition to the surge which was already reported, the company expects to see further increase, of about 1-4%in terms of revenue growth, when its Q4 2013 results are announced later in the year. Once the results were announced, the market responded well to this with an 18% increase in stock price.

Things have not always been this good. The market storage area networking recently suffered and companies such as BRCD were affected. The latest results have made the company executives to exercise a lot of optimism, believing that there is a positive development and increase in demand for such products and services. In 2012, the company reported that the revenue it obtained from selling SANs, accounted for more than 60% of all its revenues. It still expects the same trend to continue when the financial results for 2013 are announced.

Did BRCD Revenue Increase or Fall in Q3 2013?

The company announced that there was a fall in revenue by about 3%, to settle in at $536.6 million. This included a fall in the SAN revenue by about 2%. However, in the two instances, although there was a fall in revenue, the company exceeded what the analysts had projected for the same period. A year ago, BRCD reported net income of around $43.3 million, which increased almost thrice to settle at $118.7 million this time around. Analysts had expected the revenue to be $519 million, and earnings to not go beyond 12 cents per share.

Is BRCD Able to Guarantee High Growth to Investors?

The fact that BRCD was able to beat what analysts had estimated is good news. Investors with a need for shares which can assure them of positive growth have a reason to trust that this is what will give them what they exactly want. The market as a whole seems to be picking up and since the company has reported that its products are in great demand worldwide, investors have every reason to believe that they will get the high growth which they seek through this stock. The company’s cash flow appears to be healthy than analysts had thought, showing that it is healthy.

One reason why the company can expect to post better results in future, is because it has embarked on reducing the amount of money it spends on daily operations. The cost of operations had shot up but as the company carries out a few cost cutting measures, this is already producing remarkable results. The improvement in cash flow is also a result of the cost cutting measures which BRCD has put in place. The wonderful financial results which BRCD has reported, has been partially attributed to the same cost cutting measures the business undertook a while back.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.