Feeds

Mellanox trips on faulty InfiniBand cables in Q4

Revenues whacked, but gross margins apparently hold

Beginner's guide to SSL certificates

InfiniBand and Ethernet switch and adapter maker Mellanox Technologies said after the market closed on Wednesday that the company was not going to make its revenue targets for the fourth quarter and full 2012 year – in part because of the jittery economy but mostly because of a bug in InfiniBand cables.

In a statement, Mellanox said that its sales in the fourth quarter ended in December are now expected to be in the range of $119m to $121m, which is below the networker's guidance of $145m to $150m in sales when it reported its third quarter results back in mid-October. The company said that its annual revenues would be around $500m, nearly twice the $259m it raked in during 2011.

"The shortfall is primarily the result of a weaker demand environment, challenging macroeconomic conditions, and a technical issue associated with FDR 56Gb/sec InfiniBand cabling which caused approximately $20m of FDR deployments to be delayed," Mellanox explained in the statement. "The cabling issue has been resolved and is not expected to impact revenue in the future."

If you do the math, the revenue shortfall in Q4 compared to prior guidance was somewhere between $26m and $29m, so the economy and weaker demand (not necessarily the same thing, since Mellanox does have one InfiniBand competitor in Intel) together were responsible for another $6m to $9m in revenue declines.

It is not clear at this point if Mellanox will have to take a charge relating to the InfiniBand FDR cable issue, and the company has not yet explained precisely what the issue was. At press time, Mellanox had not returned calls to El Reg for comment.

Mellanox did say that gross margins in the fourth quarter were expected to be in the same range of 68.5¢ to 69.5¢ on a non-GAAP basis as projected back in October.

Mellanox reports its financial results on January 23 and will no doubt explain the situation further at that time. ®

Security for virtualized datacentres

More from The Register

next story
It's Big, it's Blue... it's simply FABLESS! IBM's chip-free future
Or why the reversal of globalisation ain't gonna 'appen
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
Microsoft and Dell’s cloud in a box: Instant Azure for the data centre
A less painful way to run Microsoft’s private cloud
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
CAGE MATCH: Microsoft, Dell open co-located bit barns in Oz
Whole new species of XaaS spawning in the antipodes
AWS pulls desktop-as-a-service from the PC
Support for PCoIP protocol means zero clients can run cloudy desktops
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.