What:Network storage technology companyBrocade Communications Systems,(NASDAQ: BRCD) stock was up more than 15% early in trading today following yesterday's third quarter earnings release. As of this writing (12:10PM ET) shares are still up nearly 12%.
So what:The company's $0.27 per share earnings and $552 million in revenue came in ahead of Wall Street analyst estimates of $0.22 EPS and $550.4 million in sales. This was a bit of a surprise, especially considering the relative weakness in some global economies, including Europe, and the foreign exchange headwinds for sales outside the U.S.
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The company's guidance for the fourth quarter, with relatively strong growth expectations in key product segments, is also playing a role in today's big jump.
Now what:Brocade continues to grow sales and execute relatively well, with its recent announcement of an expanded OEM partnership with computer makerLenovoone example. Furthermore, the company's stock is still down almost 9% so far this year, and from a valuation perspective, looks to be getting pretty cheap:
The current price-to-earnings multiple of 14 is well below Brocade's recent historical average, so this could be a good time to buy shares. But with that said, the caveat, of course, is that this is a high-tech company selling products that are indirectly tied to consumer and corporate demand. There are signs that the global economy may be getting a bit shaky, and that, of course, could weigh heavily on demand for Brocade's products in the near term.
The article Brocade Communications Systems Stock Up 12% on Earnings News originally appeared on Fool.com.
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