Can QLogic Ever Get It Together?

By Chris Lange Updated Apr 27, 6:28PM EDT · Published Jul 9, 3:57PM EDT

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Thursday morning, QLogic Corp. (NASDAQ: QLGC) announced preliminary results for its most recent quarter. Even though these are just preliminary results, the company is suffering. Perhaps QLogic just wanted to get this out of the way.

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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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.