Why QLogic Shares Plunged
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What: Shares of QLogic (NAS: QLGC) have plunged today by as much as 16% after the company reported disappointing fourth-quarter earnings.
So what: Revenue added up to $135.1 million, with earnings per share of $0.29. Meanwhile, the Street was looking for $137.6 million in sales with profits of $0.32 per share. The company also booked a big gain on the sale of its InfiniBand business to Intel.
Now what: The $109 million gain related to that transaction was excluded from results related to continuing operations. CEO Simon Biddiscombe said the sale will allow QLogic to focus on higher-growth opportunities like converged networking, among others, while also paving the way for increased investment in its current markets. A handful of firms have now cut price targets and estimates on QLogic, including Needham & Company, Goldman Sachs, and BMO Capital.
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At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Intel.Motley Fool newsletter serviceshave recommended buying shares of Intel and Goldman Sachs. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.