QLogic Earnings Beat the Street, Big Plans for 2011 in FCoE and Beyond
QLogic, provider of data, server and storage networking infrastructure solutions, has released its earnings report this week, beating expectations for Q3 2010, surging 76% on broad revenue growth.
The company’s margins are up across the board, making all its business segments shine. With a net revenue of $155.8 million and cash generated reaching $60 million, QLogic is one of the many cloud companies facing a positive outlook for the coming year, especially as partnerships increase within the industry, particularly for this company.
“We are very pleased with our strong financial performance in the third quarter. We experienced solid sequential revenue growth for both our Host and Network Products. In addition, we achieved our highest quarterly operating income in the last two years as a result of our strong gross margin performance and careful operating expense management,” said Simon Biddiscombe, president and chief executive officer, QLogic.
“Based on our accomplishments and execution against our strategies, we believe we will capitalize on the significant incremental opportunities in the rapidly expanding high performance data center connectivity market.”
Signs of QLogic’s impressive performance were early, with the company raising its forecast for the quarter this month, though some investment firms, including BMO Capital, had downgraded their stock outlook for QLogic, due to its lowered revenue estimate for 2012. This is attributed to waning expectations for host and networking revenues in the future.
Regionally, things are moving in a couple different directions as well, with a 1.2% drop in the US, while Asia-Pacific and Japanese regions jumped 15%. Shares closed up 1.4% to $17.93 after QLogic’s earnings call.
Things continue to look up for QLogic, as it’s working with HP in consolidating its FCoE efforts. HP is now OEMing QLogic 3rd Genration CNAs for use in the HP Proliant ML and DL series rack and tower servers, playing a key role in HP’s dedication to converged networking and FCoE.
Stu Miniman, an analyst at Wikibon, notes the ongoing importance of QLogic’s market, saying, “QLogic continues to build on it’s lead in the FC adapter market and is poised for growth from its #2 position in the InfiniBand switch and 10 Gb Ethernet adapter markets. QLogic has strong relationships with all of the server and storage OEMs; HP is the first of many OEMs to ship the 3GCNA, which leads the effort to provide truly converged Ethernet solutions.”
Miniman also has a thorough article on QLogic’s position within the HP FCoE story, which you can read here.
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