ISI: Never a Typical Quarter for Brocade

According to a recent research report published by ISI, Brocade Communications (NASDAQ: BRCD) has never shown a stable quarter when it comes to the Ethernet business.

“After two straight quarters of double-digit Y/Y growth, Ethernet product sales were down 3% Y/Y. On one hand, sales in the Service Provider (SP) segment (42% of Ethernet mix) were up an impressive 37% Q/Q and 64% Y/Y helped by BRCD's MLX series routers and ADX application delivery controllers. However, sales to the enterprise segment (45% of mix) were down 26% Y/Y to the lowest level in over 2 years. The company cited its transition to a 2-tier distribution channel, product transitions, deal push-outs and discounting for weakness,” ISI stated in the report.

ISI maintains its Neutral rating on Brocade, which closed yesterday at $5.50.