Stifel Nicolaus Reiterates Hold, Increases Estimates on Brocade Communications
In a morning research note, Stifel Nicolaus maintains its Hold rating on Brocade Communications Systems, Inc. (NASDAQ: BRCD) on continuous improvement on execution; focus on 16Gbps FC and sustained Ethernet traction.
On Ethernet switching results, Stifel comments, “Total Ethernet product revenue at 29% of total revenue; implies +12% seq and +11% yr/yr. Enterprise Ethernet switching revenue at 75% of total Ethernet revenues, implied a 23% sequential increase. In this, U.S. Federal Ethernet revenue saw a 38% sequential increase. Management noted that the Federal business reflected a strong improvement in orders. Enterprise, ex-Federal, revenue increased by roughly 21% yr/yr and by 19.3% on a sequential basis Service Provider Ethernet switching revenue was down ~11.6% sequentially. Converged Product revenue was up nearly 200% yr/yr, which compares to growth of 390% yr/yr in F3Q11.”
BRCD closed at $ 4.48 per share on Monday.
