Emulex: Fiscal 2Q13 Financial Results
Lower revenue in storage connectivity
This is a Press Release edited by StorageNewsletter.com on February 1, 2013 at 3:36 pm| (in US$ million) | 2Q12 | 2Q13 | 6 mo. 12 | 6 mo. 13 |
| Revenues | 128.7 | 122.1 | 247.1 | 241.4 |
| Growth | -5% | -2% | ||
| Net income (loss) | 15.0 | 5.6 | 7.8 | 6.2 |
Emulex Corporation announced results for its second quarter of fiscal 2013 which ended on December 30, 2012.
In the second quarter, total net revenues of $122.1 million represented an increase of 2% over the first quarter results.
On a GAAP basis, Emulex recorded net income of $5.6 million, or $0.06 per diluted share, compared to first quarter GAAP income of $0.7 million, or $0.01 per share. Non-GAAP net income for the second quarter was $17.2 million, or $0.19 per diluted share, essentially flat with the $0.19 of diluted earnings per share reported in the first quarter.
Cash, cash equivalents and investments at the end of the quarter totaled $211.2 million compared to $186.4 million at the end of the first quarter.
CEO Jim McCluney commented: "I’m pleased with the solid execution we were able to deliver for the second quarter, once again meeting both our top line revenue and our earnings goals. In addition to achieving our quarterly revenue and earnings objectives, we also strengthened our balance sheet, exiting the quarter with over $211 million in available cash and investments."
"Looking forward, we are well positioned in 16Gb FC to continue the share gain momentum we have delivered over the past three quarters, and with expected completion of our Endace acquisition this quarter, we will further increase our relevance as a thought leader in connectivity and management of high performance, converged Ethernet networks," McCluney concluded.
Business Outlook
For the third quarter of fiscal 2013, Emulex is forecasting total net revenues in the range of $110-$114 million. The company expects non-GAAP earnings per diluted share of $0.12 – $0.14 in the third quarter. Incremental to this guidance, it expect approximately $0.06 per diluted share related to the retroactive portion of the federal R& D tax credit. GAAP estimates for the third quarter reflect approximately $0.30 per diluted share in expected charges arising primarily from amortization of intangibles, stock-based compensation, costs associated with the proposed acquisition of Endace and the royalties, mitigation expenses and license fees associated with the Broadcom patent litigation, as well as the associated tax impact and U. S. valuation allowance.
Second Quarter Business Highlights
- Announced intent to acquire Endace Limited, a network performance management company that provides network monitoring appliances, network analytics software and high speed network access switching with 100% accuracy
- Gained more than seven points of overall FC revenue market share over nearest competitor and accelerated leadership in emerging 16Gb FC segment with more than 75% market share according to Dell’Oro Group’s Q3 2012 FC Adapter Vendor report and Crehan Research’s Q3 2012 Server-class Adapter and LOM market share reports
- Announced new LightPulse 16Gb FC blade adapters for Dell PowerEdge blade servers to support the new end-to-end 16Gb FC blade solution from Dell, extending 16Gb FC connectivity for Dell customers across blade, storage and servers
- Delivered an integrated HP NC553i 10Gb FlexFabric adapter for new HP Integrity BL860c i4, BL870c i4 and BL890c i4 Server Blades, providing I/O flexibility, efficiency and simplicity for LAN and SAN connectivity
- Announced OneCore Storage SDK, a solution for independent hardware and software vendors (IHVs and ISVs) and system integrators developing storage, SSD, application and networking appliance solutions requiring low latency and high performance I/O connectivity
- Supports the VMware vSphere 5.1 Web Client with OneCommand Manager plug-in for VMware vCenter Server, integrating real-time lifecycle management of adapters provided by Emulex into the VMware vCenter Server console, centralizing and simplifying virtualization management
- Won Systems Management Product of the Year award for Emulex OneCommand Vision 3.0 at the Storage, Virtualization and Cloud Computing (SVC) Awards
- Named to CRN’s 2013 Data Center 100 list, recognizing technology vendors for powering, supporting and protecting today’s data center services in an environmentally and economically friendly manner, while boosting efficiency and productivity
- Partnered with Gnodal to deliver a joint high frequency trading (HFT) solution using OneConnect 10GbE Network Xceleration OCe12000-D adapters, with FastStack DBL software, and a Gnodal GS4008 10GbE switch, eliminating network congestion and providing low latency
- Announced a joint live data management solution for analyzing big data with uCIRRUS using OneConnect 10GbE Network Xceleration OCe12000-D adapters, with FastStack Sniffer10G software, and uCIRRUS’s XPRESSmp
Comments
Abstracts of the earnings call transcript
Mike Rockenbach, CFO:
"Net revenues for the quarter increased 2% sequentially but declined 5% year-over-year primarily due to lower revenues in our storage connectivity products.
" (...) our network connectivity products or NCP represented 79% of our net revenues this quarter.
"NCP revenues totaled $96 million which is down slightly from the $97 million reported both in F1Q and the comparable quarter the prior year.
"Net revenues for our storage connectivity products, or SCPs, totaled $23 million accounting for 18% of revenues for the quarter. SCP revenues increased over 20% sequentially but were down 18% from F2Q last year. As a reminder, we are modeling for SCP revenues to be in the $80 million to $85 million range for the full fiscal year. Net revenues for our Advanced Technology and other products were $3 million."
Jim McCluney, CEO:
"Our share gains are being driven primarily by 8Gb deployments and we fully expect the share gain momentum to continue with the transition to 16Gb over the coming year."
Jeff Benck, president and COO:
"Exploiting our time to market advantage in 16Gb over the past couple of quarters, we have launched a number of new products with our OEMs including Dell, EMC, HP, IBM, and NetApp."
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