Brocade shares rose 6 percent to $10.30 after-hours on Thursday, after the company's third-quarter earnings beat analysts' estimates by five cents.

For the quarter, which ended Aug. 1, Brocade reported revenues of $552 million and net income of $92 million, or 21 cents per share. Last year's third quarter saw Brocade report revenues of $545 million and net income of $87 million, or 20 cents per share.

Non-GAAP earnings of 27 cents per share outdid the analyst consensus of 22 cents reported by Thomson Financial.

It was a strong quarter for the IP networking side of Brocade, which tallied revenues of $154 million, up 16 percent year-on-year. Service provider sales were up 43 percent and sales to the federal government were up 32 percent.

The flip side is that storage area networking (SAN), Brocade's original business, fell 5 percent year-over-year, to $309 million. But Brocade expects that the decline of Fibre Channel has stabilized and "will remain durable for many years," as CEO Lloyd Carney said on Thursday's earnings call.

Revenues from SteelApp, the NFV-related chunk of Riverbed that Brocade acquired in March, hit Brocade's target of $5 million to $7 million. Officials didn't elaborate on that during the call, but said they expect SteelApp to reach the same range during the fourth quarter.

SteelApp will eventually be integrated into Brocade's Virtual ADX, at which point its revenues will be included in the IP business.

One analyst on the call asked about AT&T's Domain 2.0 program, where Brocade was picked to be a supplier. Jeffrey Lindholm, Brocade's senior vice president of sales, said on the call that Brocade is contributing on multiple fronts, including virtual machines and controllers, and that revenues should come soon — but he avoided any specifics.

AT&T announced the vendors for Domain 2.0 — a program intended to get the carrier working with more suppliers, particularly startups — but hasn't discussed many specifics about which products are being used. The analyst's question probably came up because Metaswitch revealed this week that Perimeta, its virtual session border controller (vSBC), is one of the products AT&T intends to use.

Earnings-call transcript courtesy of Seeking Alpha.