For some background: QLogic is a global leader and technology innovator in high-performance server and storage networking connectivity products. Leading original equipment manufacturers (OEMs) and channel partners worldwide rely on this company for their server and storage networking solutions.
The company expects to report net revenue of approximately $113 million for the first quarter of fiscal 2016, compared to the previously forecast range of $124 million to $132 million. QLogic expects to report net income per diluted share in the range of $0.16 to $0.17, compared to the previously forecast range of $0.23 to $0.27 per diluted share. There are consensus estimates of $0.25 in earnings per share on $128.29 million in revenue.
The explanation behind these poor preliminary results was lower-than-expected demand from general weakness in the traditional enterprise server and storage markets. Not to mention a build-up of inventory at certain OEM customers was the result of a slower next-generation server transition in enterprise environments.
Prasad Rampalli, president and CEO of QLogic, said:
We are disappointed with the level of business activity during the quarter. We will work through these headwinds, leveraging our technologies and solutions to expand our addressable market opportunities. We believe QLogic is well positioned to capitalize on these opportunities in the data center.
It will all come down to what QLogic reports when it reveals earnings. The company will announce its first-quarter 2016 financial results after markets close on Thursday, July 30, 2015.
Shares of QLogic were down nearly 22% at $10.97 late on Thursday. The stock has a consensus analyst price target of $16.92 and a 52-week trading range of $8.70 to $15.93.
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