In-line Not Good Enough For Emulex (ELX)

Shares of Emulex Corporation ELX are falling in the after-hours after the company reported generally in-line earnings and guidance. Shares are off by 2.98%, trading at $11.40; the stock closed the regular session down 3.53%, at $11.75. ELX reported Q2 EPS of $0.15 on revenues of $114 million; this compares to the Street consensus of $0.13 per share on revenues of $113.4 million. The company also guided Q3 in-line with expectations, saying it sees Q3 EPS in the range of $0.08-0.11 on revenues of $108-112 million. The Street was at $0.11 per shares on revenues of $110.52 million. CEO Jim McCluney commented, "Our December quarter results were a strong finish for calendar 2010, which represents 20% revenue growth over 2009. Revenues were at the high end of our guidance and our gross margins improved sequentially as we began to realize the benefits from the recently completed ServerEngines acquisition." "Host Server Products sequential revenue growth of 17% was driven by share gains in our core Fibre Channel products and the continuing ramp of our 10GbE UCNAs and ULOMs, which are now over 10% of our revenues," McCluney continued. "With the next round of 10GbE server design activities well underway at our customers, we are well positioned to expand on the momentum that has been building over the past year," added McCluney. Emulex Corporation is a provider of a range of network convergence solutions that connect servers, storage, and networks within the data center.