Brocade Communications Systems, Inc.(NASDAQ:BRCD) will make public its fiscal 3Q16 results on August 25, 2016, with analysts giving ~$566.6 million and $580.8 million as low and high estimates respectively. However, this remains to be seen given that the US-based (SPY) technology company has on a previous occasion curved above analysts’ EPS estimates in fiscal 3Q15 by 22.7% with EPS of $0.27. The same has also happened in fiscal 4Q15 and 1Q16 by 8.3% and 20.8%, respectively.
The company’s YoY (year-over-year) revenues, as well as those for quarter-over-quarter, fell 4% and 9% respectively. Its market cap of $3.9 billion while that if its peers, Hewlett Packard Enterprise Co(NYSE:HPE), NetApp Inc. (NASDAQ:NTAP) and QLogic Corporation (NASDAQ:QLGC) is at $36 billion, $7.8 billion, and $1.4 billion, respectively.
Various acquisitions by Brocade Communications Systems have propelled the company’s growth
The first acquisition that gave away the company’s $6.45 in cash and 0.75 shares of common stock was that of Ruckus Wireless Inc (NYSE:RKUS) which took place in May 2016 at a cost of $1.5 billion and under Ruckus stockholders’ agreement. The deal would give Brocade entry into the networking market the likes of India and China that have steady upcoming opportunities for 5G mobile services as well as the Wi-Fi technologies that have become the talk of the industry.
Lloyd Carney, Brocade’s CEO says that coming together if the companies will enhance superior focus on innovation development. It will also bring on board best-in-class technology solutions which will provide customers with greater flexibility in meeting their infrastructure requirements the likes of performance. To many companies, digitalization of businesses is the latest move that will give them a new face.
Brocade’s second partnership whose role will be to avail new IP networking technologies is with DLT Solutions. DLT Solutions partnered with Brocade to help in securing its very critical applications the likes of financial systems and customer relationship management. A third one is that of Harris Corporation (NYSE:HRS) which will bring on board Harris’s cyber security technology integration for purposes of enhanced cyber security solutions. Brocade has much more in the store it seems, but the question is, will it sustain all these acquisitions? What impact do they have on the revenues?