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Brocade sees Q1 Ethernet slump

Alex Scroxton
Brocade has suffered a setback to its network ambitions during the first quarter of its fiscal 2010, as sequential Ethernet revenues plunged 13% as a proportion of total sales.

The storage and networking vendor, which has ambitions to compete with the networking industry's elite, admitted that more needed to be done to bulk up its Ethernet business after the wake-up call.

"Brocade plans to re-energise our Ethernet business strategy, which targets opening hundreds of new direct enterprise Ethernet accounts each quarter," said CEO Michael Klayko.

Brocade rounded out the first three months of the financial year, which closed on 30 January, with record quarterly sales of $539.5m (£350.1m), up 25% year-on-year, and GAAP net profit of $51.1m, reversing a loss of $23.9m this time last year.

"As one of two end-to-end networking companies worldwide, we believe Brocade is well positioned and are optimistic about our ability to take advantage of the expected worldwide growth of networking spending in 2010," continued Klayko.

Meanwhile, a jury in San Francisco has heard that former Brocade boss Greg Reyes "routinely" falsified records of stock option grants made to employees during the dotcom boom in the first day of his retrial.

Reyes was convicted in 2007 but won the right to a retrial after it was found that prosecutors made false assertions to the jury.

Prosecutors yesterday claimed that Reyes had gamed the system to "pad his pocket and the pocket of those inside the company at the expense of those outside the company."

The defence countered by implicating Brocade's financing department in the scandal.

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