UPDATED 12:14 EDT / MAY 04 2012

QLogic Profit Rises, Revenue Declines in Q4

Networking equipment maker QLogic reported mixed results for its fourth quarter, beating analysts’ estimates with its profit but in light of increased spending and lowered sales to top it off.

QLogic earned GAAP income of $29.5 million or 29 cents per share, four cents above the Zacks Consensus Estimate, on revenue of $166.2 million. The latter figure represents a decline of 7.5 percent from what the company reported for the same period last year – a figure that beats what QLogic expected, but failed to please the market.

Overall the firm slid by 15 percent – the company’s core business saw sales decrease by 3.1 percent to  $105.6 million, or just over 78 percent of revenue across the board, and networking decline dropped by 22.4 percent. R&D and sales cost QLogic 7.1 percent more than they did in the fourth quarter of the last fiscal year.

As far as the near term outlook goes Zacks looks towards QLogic’s partner base for optimism:

“We believe that QLogic will benefit from major OEM customer wins and increased focus on its key strategic initiatives (post the InfiniBand sale) over the long term. Moreover, QLogic has gained significant traction in the fiber channel adaptor market and the 10 Gb Ethernet adapters market, primarily driven by strong customer demand over the last 12 months.”

The company has put quite an emphasis on both these areas in recent months. In April QLogic announced a partnership with QLogic to integrate its 8200 Series GbE adapters into Fujitsu’s ETERNUS storage systems, and before that it struck a similar agreement with Dell. There’s also the fact that it hauled in a handsome $125 million from Intel, which acquired QLogic’s InfiniBand business.


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