Feeds

McData blames weak IT spending for Q2 loss

SEC review too

  • alert
  • submit to reddit

Maximizing your infrastructure through virtualization

McData today posted disappointing results for its second quarter, blaming a loss on soft IT spending and tight pricing.

The storage networking company reported revenue of $98.2m, which compares to the $107m reported in the same period one year ago. McData's net loss for the second quarter came in at $5.4m - a significant drop from the $9.1m profit reported last year. The company also announced that it will refile financial documents for 2003 and the first quarter of 2004 due to an SEC (Securities and Exchange Commission) review, although it does not expect to alter revenue figures from these periods.

"Our positive results for the quarter demonstrate that we are meeting the needs of an expanding market," said John Kelley, McDATA's CEO.

Kelley's optimism, however, was muted when McData blamed "a subdued IT spending environment and a continued competitive marketplace" for the less than stellar second quarter revenue total. The comments around IT spending are somewhat surprising given that EMC - McData's largest customer - enjoyed more than a 30 percent rise in revenue in its most recent quarter. Neither EMC, IBM nor Dell - all McData customers - complained about soft IT spending in their recent earnings reports.

McData's product revenue hit $74.9m in the period, and software revenue came in at $14.8m.

The company expects third quarter revenue between $98m and $102m and breakeven earnings per share. On the SEC issue, McData said, "The SEC routinely reviews public company filings from time to time. The company's previously reported results will not be affected by any supplements to its disclosures." It has moved a Sept. shareholder meeting to a later date, as it works to resubmit the 2003 and Q1 2004 filings. ®

Related stories

NetApp files away big Q1 gain
HP's order system chaos to continue throughout August
HP preps little EVA starter box
Dell dances past the IT sector with strong Q2
IBM SVC - real-world storage virtualisation

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
VVOL update: Are any vendors NOT leaping into bed with VMware?
It's not yet been released but everyone thinks it's the dog's danglies
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.