The Ruckus deal closed on May 27.
Non-GAAP earnings per share for the quarter, which ended July 30, were 21 cents, down 21 percent year-over-year. (Analysts expected 16 cents, according to Thomson Financial). Brocade reported that the decline was primarily due to the acquisition and to higher operating expenses.
On today’s earnings call, Brocade CFO Dan Fairfax said the company was watching the upcoming closure of Dell’s purchase of EMC. “Both are customers of Brocade,” said Fairfax. “We believe it will be positive in the long term, but we’re concerned about near-term disruption.”
Brocade executives mentioned a decline in U.S. federal sales several times as they discussed their storage-area networking (SAN) and IP networking businesses.
SAN product revenues of $282 million were down 9 percent year-over-year and 5 percent sequentially. The company blamed the SAN declines on a longer time-to-closure for many large deals and the weaker storage demand environment.
IP networking product revenues of $209 million, including $73 million from Ruckus Wireless, were up 36 percent year-over-year. The increase helped to partly offset U.S. federal revenues, which were down 26 percent year-over-year, primarily due to the timing of large orders. Sequentially, IP networking product revenues increased 59 percent, primarily due to the inclusion of Ruckus revenue.