Emulex shares rise after company turns profit

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NEW YORK (AP) — Shares of Emulex Corp. surged in trading Friday, a day after the data-storage equipment and network equipment maker reported that it reversed a year-ago loss to post a profit in its fiscal second quarter.

THE SPARK: On Thursday, the company said it earned $15 million, or 17 cents per share, in the quarter ended Jan. 1. That compared with a year-ago loss of $41 million, or 47 cents per share, when it took major write-downs.

The company said it would have earned 26 cents per share excluding items such as stock-based compensation expenses.

Revenue rose 13 percent, to $128.7 million.

Analysts surveyed by FactSet had expected adjusted profit of 21 cents per share on revenue of $126.4 million.

The company also said it expects third-quarter adjusted earnings of 17 to 19 cents per share on revenue of $121 million to $125 million. Analysts were expecting 14 cents per share on revenue of $120.5 million.

THE BIG PICTURE: Earlier this month, Emulex said that its second-quarter earnings would be above its earlier guidance as it recovered production after Thailand flooding and overcame supply issues. Thursday’s results topped the updated guidance.

THE ANALYSIS: Morgan Keegan analyst Harsh Kumar reiterated his “outperform” rating on Emulex, saying the company is “favorably positioned” to take advantage of Intel Corp.’s Romley launch.

THE SHARES: The shares rose $1.39, or 15 percent, to end at $10.66. That’s near the top of their 52-week range of $5.86 to $12.38.