McDATA Raises Q1 Estimates -- Again

Wednesday May 7th 2003 by boston.internet.com Staff
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The firm says sales and profits will be better than expected on strong demand for Storage Area Networking components.

McDATA has again raised its first quarter financial estimates on strong demand for its Storage Area Networking (SAN) components.

The Broomfield, Colo. firm expects revenue of $102 million to $103 million for the three month period, compared to earlier projections of between $92 million and $97 million.

Earnings will be "at least" 5 cents per share (excluding non-cash charges), higher than the previous guidance of between 2 cents and 4 cents per share.

Analysts surveyed by Thomson/First Call predicted earnings per share of 4 cents per share on revenues of $96.5 million. McDATA's official results will be announced May 29.

McDATA's success is largely due its partner strategy. While it spun out of industry giant EMC , its enterprise hardware, software, and services are also available through Hitachi Data Systems, Hewlett-Packard, IBM, and StorageTek.

McDATA also expanded its geographic reach during the first quarter with the opening of an office in Beijing to serve customers in China and elsewhere in the Asia-Pacific region.

The good news comes three weeks after storage giant EMC posted a $35 million profit in its first quarter, due in part to strong cost-cutting measures.

The Hopkinton, Mass. storage provider, which pared its workforce by 1,350 last fall to cut costs, said its first quarter results also reflect growth in customer adoption of its new, high-end storage products such as the Symmetrix DMX systems.

This story originally appeared on boston.internet.com.

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