Brocade (BRCD) VP Resignation Viewed as Negative

Brocade Communications (Nasdaq: BRCD) confirmed in an email statement to Bloomberg that its vice president of Americas sales is leaving the company to pursue other opportunities. In the view of Wells Fargo analyst Jess Lubert, the departure is a negative development.

"We view Mr. Ellery's departure as a negative development for Brocade, as we believe he was well respected in the Ethernet sales organization and his resignation may lead to additional turnover in the business. We also view his departure as a sign that changes are taking place at Brocade, with the company recently hiring Jeff Lindholm as the new SVP of Worldwide sales, announcing plans to eliminate $100MM in cost from the business, and refocusing the Ethernet sales effort on high margin areas where the company believes it can win," said Lubert.

"While these changes may position Brocade to deliver improved growth and profitability over time, we see the potential for near-term disruptions (as illustrated by Mr. Ellery's departure), which could negatively impact results and make it difficult for the stock to work over the next several quarters," added the analyst.

Wells Fargo has a Market Perform rating on Brocade.

For an analyst ratings summary and ratings history on Brocade (NASDAQ: BRCD)click here. For more ratings news on Brocade click here.

Shares of Brocade closed at $5.78 yesterday.

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