Healthy Fibre biz fattens QLogic's bottom line... and not before time

Only way is up for storage adapter supplier

Internet Security Threat Report 2014

It's a new fiscal year and a fresh first quarter for QLogic... and it looks like Q’s droopy revenue woes are set to end. It appears to have bottomed out, with numbers once again on the rise as Q starts growing again.

Generally speaking, Q supplies storage access adapters and controllers for Fibre Channel and Ethernet.

Revenues for the quarter were $119.4m, nicely up 6 per cent on the year-ago quarter’s $113.1m and the immediate prior quarter's $115.7m.

Net income was $6m, much better than the year-ago quarter’s $3.1m loss and the prior quarter’s $46m loss. It seems that newish CEO Prasad Rampilli has cleared out the stables and the operation is now leaner, meaner and keener, although our “leaner" description is open to question.

One of the two main business units did well, the other did not.

  • Revenue from Advanced Connectivity Platforms (Fibre Channel and acquired Broadcom GbitE controllers) was $104.7m, increasing 12 per cent from $93.2m a year ago.
  • Revenue from Legacy Connectivity Products (older products and 1GbitE iSCSI) was $14.7m, down from the year-ago quarter’s $19.9m in the same quarter last year.

Rampilli’s prepared quote said: “We are making significant progress in the enterprise Ethernet market and our revenue from these products is an important contributor to our overall growth. We continue to believe that we are well positioned to experience revenue growth through expanded market opportunities.”

The adoption of its 16Gbit/s Fibre Channel products is going well and sampling of 32Gbit/s FC products should start towards the end of 2014.

Stifel Nicolaus MD Aaron Rakers pointed out the business’ internal operational effectiveness was weakening: “QLogic’s DSO (Days Sales Outstanding) stood at 63 days, vs. 51 days in the prior quarter. Inventory turns were 6.6x, vs. 8.2x in the prior quarter. As previously noted, the company’s cash conversion cycle increased significantly to 52 days, vs. 21 days in the prior quarter.”

DSO, inventory turns and cash conversion cycles all look at how effective Q’s business operations are in terms of collecting money from customers, minimising the time stock spends in its warehouses, and reducing the time between cash being spent buying supplies, building and selling product and cash flowing back into the coffers from customers.

Hopefully Q’s revenues and profits will grow again next quarter and its business operations will improve as well, meaning Q can be described properly as becoming leaner. Its revenue bottom should now be behind it. ®

Beginner's guide to SSL certificates

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'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
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
Symantec backs out of Backup Exec: Plans to can appliance in Jan
Will still provide support to existing customers
prev story


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.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.