For Immediate Release
Chicago, IL – August 25, 2010 – Zacks.com Analyst Blog features: QLogic Corporation (OLGS), Intel Corporation (INTC), Cisco Systems Inc. (CSCO), Dell Inc. (DELL) and Hewlett-Packard Company (HPQ ).
Here are highlights from Tuesday’s Analyst Blog:
QLogic Gains Market Share
QLogic Corporation (OLGS) announced that the company has gained share in the 10 Gigabit Ethernet adapter market for the fifth consecutive quarter, ending June 2010. QLogic is a leading designer and supplier of storage networking, server networking, data networking and converged networking infrastructure solutions.
According to data published by market researchers – Dell’Oro Group, QLogic has 15.7% share in the 10 Gigabit Ethernet adapter market and enjoys the second spot next to Intel Corporation (INTC).
QLogic noted that increasing shipments to major original equipment manufacturers (OEM) such as Cisco Systems Inc. (CSCO), Dell Inc. (DELL) and Hewlett-Packard Company (HPQ ) and many others drove the market share.
10 Gigabit Ethernet refers to an Ethernet standard that transmits data at 10 Gigabit per second through copper and optical medium. 10 Gigabit Ethernet runs only in full-duplex (FDX) mode and does not support CSMA/CD, the common Ethernet collision method used to gain access to the physical medium. 10 Gigabit Ethernet improves the throughput of servers, server appliances and storage platforms at a significantly lower cost, making it an obvious choice for big datacenters.
According to Dell’Oro Group, 10 Gigabit Ethernet adapter market is expected to grow from $200.0 million in 2010 to nearly $800.0 million by 2014, primarily driven by a huge demand for converged data center infrastructures and the increasing prevalence of virtual machines. In our view, QLogic is well positioned to benefit from such massive growth.
We believe as cloud computing gains more significance and virtualization becomes inherent for every datacenter, demand for higher bandwidth will increase considerably. We expect this massive demand to increase the use of the 10 Gigabit Ethernet adaptors going forward, providing a significant growth to QLogic.
In the first quarter of fiscal 2011, QLogic reported revenue growth of 16.2% year over year to $142.6 million and earnings per share of 21 cents.
We continue to maintain a Neutral rating on a long-term basis (6-12 months). We believe that QLogic will benefit from major OEM customer wins and increased focus on its key strategic initiatives over the long term.
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