Brocade Profits Dip, CEO Optimistic

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Storage switch vendor Brocade Communications Systems Inc. reported lower second quarter profits on Tuesday.The San Jose, California-based company reported net income of $12 million, or 5 cents per share, for its fiscal second quarter ended April 28, compared with net income of $13.3 million, or 6 per share a year ago.

Sales rose to $115.2 million from $62.1 million in the same period of 2000. Greg Reyes, Chairman and Chief Executive of Brocade, said "we are now seeing signs that IT budgets may be thawing," he said, referring to corporation's information technology spending. The company already warned last month it expected to earn between 5 cents and 6 cents per share, which brought analysts expectations down from the 11 cents per share consensus to an average expectation the company would earn 5 cents per share.

In related news, Reyes stated that "on April 20, we indicated we had seen some softening internationally. Probably in the March April timeframe Europe started to correlate with the U.S. economic climate. We've factored those puts and takes into our forward looking guidance."

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