Oh no, you're thinking, yet another cookie pop-up. Well, sorry, it's the law. We measure how many people read us, and ensure you see relevant ads, by storing cookies on your device. If you're cool with that, hit “Accept all Cookies”. For more info and to customize your settings, hit “Customize Settings”.

Review and manage your consent

Here's an overview of our use of cookies, similar technologies and how to manage them. You can also change your choices at any time, by hitting the “Your Consent Options” link on the site's footer.

Manage Cookie Preferences
  • These cookies are strictly necessary so that you can navigate the site as normal and use all features. Without these cookies we cannot provide you with the service that you expect.

  • These cookies are used to make advertising messages more relevant to you. They perform functions like preventing the same ad from continuously reappearing, ensuring that ads are properly displayed for advertisers, and in some cases selecting advertisements that are based on your interests.

  • These cookies collect information in aggregate form to help us understand how our websites are being used. They allow us to count visits and traffic sources so that we can measure and improve the performance of our sites. If people say no to these cookies, we do not know how many people have visited and we cannot monitor performance.

See also our Cookie policy and Privacy policy.

This article is more than 1 year old

Emulex ends seven-quarter run of losses

Posts $4.3m profits

+Comment After seven straight quarters of losses, Emulex has made a $4.3m profit in its second financial 2015 quarter – but that performance might not be repeated next quarter.

The profit was better by far than the $4m loss a year ago and the $700k loss in the previous quarter. Revenues were $111.1m, above guidance but still 9.7 per cent less than a year ago, which makes the profit picture more impressive.

Sequentially, revenues grew seven per cent but that Q1-Q2 uplift is a seasonal pattern for Emulex. The profit recovery signs were visible last quarter when the loss slipped below a million bucks – having been between -$3m and -$15m in the preceding six quarters.

Clearly the business is being more tightly managed and costs are under better control. We might call that the Elliott effect, that activist investor having boardroom influence now.

President/CEO Jeff Benck said: "The second quarter demonstrated continued progress with initiatives put in place at Emulex over the last 18 months, including the delivery of the broadest set of new Ethernet and Fibre Channel products in the Company’s history, increased focus on execution, and a greater emphasis on fiscal discipline." Exactly.

Revenues benefited from "healthy demand for our Fibre Channel portfolio and share gains aided by accelerating adoption of our latest Gen 5 Fibre Channel (16Git/s) products."

However, network visibility products (NVP – meaning Endace) did poorly, with Stifel Nicolaus MD Aaron Rakers writing, "Revenue of $6.3m, was down 35 per cent yr/yr, amounting to 6 per cent of total revenue for the quarter."

Benck said Emulex has got some OEM contracts for its 10GbitE Ethernet products and these should cause a shipment ramp as new X86 servers get taken up."

Emulex_revenues_To_Q2fy2015

A profit at last - but it might not last

+Comment

The next quarter should see revenues between $97m and $103m, representative of a seasonal Q2-Q3 downturn; in the year-ago third quarter they were $109.3 million. Rakers wrote: "Emulex is expecting a seasonal F3Q15 Network Connectivity Product (NCP) sequential decline in the high-single digits to low-double digits. The company expects a decline in Fibre Channel (we estimate -12 per cent seq.) following strong December (Q2) quarter results, while 10GbitE is expected be up sequentially."

He added he "expects NVP revenue to be up sequentially in F3Q15 [with] ... a revenue contribution of $7m."

Making a profit with revenues $8m less than the second quarter, and its $4.3m profit, might be a struggle if not darned impossible. Expect a loss. ®

Similar topics

TIP US OFF

Send us news


Other stories you might like