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Emulex Corp. F3Q08 (Qtr End 01/30/08) Earnings Call Transcript

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2008-04-29 20:42:46.0

Tags: Emulex Corp.

Question-and-Answer Session

Operator

(Operator Instructions). And our first question comes from Harsh Kumar with Morgan Keegan.

Harsh Kumar - Morgan Keegan

Hi, guys. Can you hear me okay?

Jim McCluney

Sure.

Harsh Kumar - Morgan Keegan

A couple of questions. Sort of concerned about your HSP revenues being down 10%. I'm hoping you could give us some color on that. That seems like a little bit more than your normal seasonality. I understand your commentary about financials in particular. Was there anything specific that happened, any sort of area that you saw more weakness than the other?

Jim McCluney

Yeah, Harsh. I think as I mentioned on the call, even though we saw 20% year-over-year core growth, our growth was significantly weighted towards the dual-core HBAs and mezz cards, where we expected to gain share in these platforms, and I think we've done that.

Further, what we did experience was that our single channel high-end HBAs were weaker than we would have expected, when taken into account the typical seasonality that we've seen in March quarters. We think this is at least partially due to our dominance in the high-end environments, which have more exposure to areas of the financial verticals, which may have been weaker than normal.

We saw some of this coming from some of our key customers as well, who expressed some weakness in the high-end of the product line. So I think our concentration there and our dominance in the high-end contributed to more than normal seasonality in the March quarter for HSP.

Harsh Kumar - Morgan Keegan

Got it. And that's very helpful. That is pretty fair. Would you expect, Jim, that your HSP business would come back in the June quarter? You sounded like you were pretty comfortable that your overall business will bounce back in the second half. I guess I'm curious what gives you that comfort level? Is there something you are seeing? And then secondly and specifically, would HSP come back in the June quarter?

Jim McCluney

Yeah. We're seeing HSP come back. There is some last customer product launches. We're still being very cautious though. We don't see it -- what we would have normally have seen in a June quarter, and we'll model that into our guidance.

As we look out again on the back half of the year, we're listening very closely to our customers. And we get our forecasts, and we're seeing business returning to normal. We expect a seasonal very strong December quarter as well.

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