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BMO Capital Maintains a 'Market Perform' on QLogic (QLGC); Slower-Than-Expected Ramp in Romley

May 4, 2012 10:24 AM EDT Send to a Friend
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Price: $9.63 --0%

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BMO Capital maintains a 'Market Perform' on QLogic (NASDAQ: QLGC) price target lowered from $17 to $16.

Analyst, Keith Bachman, said, "QLGC reported weak March-quarter results, with both revenue and EPS below expectations, net of the tax benefit. Total revenue was $135.1 million vs. our/consensus estimates of $137.5 million, while Host revenue of $105.6million was below our $108 million estimate. EPS was $0.34 vs. our/consensus estimates of $0.32, though lower taxes added $0.03 to EPS.
Impact: Negative. Both QLGC and Emulex (NYSE: ELX) have provided weak June-quarter outlooks, owing to a slower-than-expected ramp in Romley."

"We note that QLGC indicated higher levels of interest from Host customers, and we believe QLGC could potentially gain incremental share in 10GbE, if ELX's litigation with Broadcom (Nasdaq: BRCM) continues for an extended period. While Host products could see better-than-seasonal growth in the September quarter, we believe the delays and slower ramp in Romley raises some concerns on the 10GbE revenue growth opportunities, as well as lower server unit growth on fibre channel HBAs."

For an analyst ratings summary and ratings history on QLogic click here. For more ratings news on QLogic click here.

Shares of QLogic closed at $16.86 yesterday.




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