Emulex settles class-action suit

Paul Clinton

Data storage company Emulex Corp. had a mixed day Thursday, reporting

a breakeven quarter to beat Wall Street’s expectations by a penny per

share. The company also agreed to pay out $39.5 million to settle a

class-action lawsuit.

The company, based in the city since the early 1970s, said it was

settling a shareholder lawsuit filed in 2001 in response to comments

by company executives during a January 2001 conference call about

earnings.

By agreeing to the payout, Emulex is not acknowledging any

wrongdoing, company leaders said.

“With these tentative settlements, we can put the expense and

distraction of this litigation behind us and focus on executing out

strategy of delivering innovative products to the market,” Rockenbach

said. “Emulex remains a financially strong company.”

The company said 32% of the settlement would be paid by its

insurance provider; the remaining $16.7 million was recorded as an

after-tax charge in the earnings.

Emulex reported it grew revenue in its third quarter 14%, to $79.6

million, compared to the same quarter a year earlier.

“We had the best quarter in the history of the company,” said

Michael Rockenbach, the company’s chief financial officer. “Given the

environment we’re in, we’re executing well as a company.”

Emulex is the top provider of hot bus adapters, sophisticated

devices that help companies manage a massive flow of information. For

the quarter ending March 31, the company said it lost $248,000,

according to generally accepted accounting principles. A year ago,

Emulex lost $16.5 million.

Earnings came in at 22 cents per share, which were above the

21-cents-per-share consensus of analysts compiled by First

Call/Thomson Financial.