What QLogic Corporation (NASDAQ:QLGC) Results Say?
QLogic Corporation (NASDAQ:QLGC) reported its fiscal 2014Q3 earnings of 25 cents/ share, that topped the average analyst estimates by 6 cents. EPS (with the inclusion of stock-based compensation and excluding 1-time items) rose 69.3% y-o-y and 44.3 percent sequentially in quarter. Revenues continued to be flat on a y-o-y basis but rose 6.1% sequentially to $119.4M, which was a little better than the average analyst projections. Revenues were just in-line with the higher-end of company’s guidance of $114.0M -$120.0M.
In the Q3, Advanced Connectivity Platform (the strategic server & storage connectivity products) revenues rose 1.5% y-o-y and 4.7% q-o-q to $98.5 million. QLogic Corporation (NASDAQ:QLGC)’s Legacy connectivity products (the Fibre Channel Switch products & the 1 gig iSCSI products) revenues dropped 6.2% from the same quarter in the previous year but rose 2.8% sequentially to $21.0M .Gross margin rose 50 basis-points (bps) from the same quarter of the previous year and 20 bps from the earlier quarter to 68.0%. This was in-line with the higher-end of company’s guidance of 67.0% -68.0%. The y-o-y growth was mainly due to the favorable product -mix in the quarter. The total operating expense dropped 10.8% y-o-y but was almost plateaued on a sequential basis at $58.8M.
The y-o-y drop was attributed to lower engineering & development costs (which dipped 8.3%) as well as sales & marketing (that dropped 16.6%) costs. QLogic Corporation (NASDAQ:QLGC)’s operating expenses were a little above the management’s expectation of $56.0M. The company QLogic expects its fiscal 2014 Q4 revenues to be in the $110.0M-$116.0M range. Revenues from its Advanced Connectivity Platforms are projected to decrease around 2% on a sequential basis. The company’s acquisition of Brocade’s adapter-business is projected to boost its revenues in the forthcoming quarter. QLogic Corporation (NASDAQ:QLGC)’ management projects that revenues from its Legacy Connectivity Products will be in the $15.0M-$17.0M range.