A UBS analyst downgraded networking equipment maker Brocade Communications Systems Inc. to "neutral" from "buy" on Wednesday, citing the poor performance of its Internet protocol products business.
Analyst Nikos Theodosopoulos said the company's first-quarter results to Jan. 30 showed that its IP products revenue fell 24 percent from the previous quarter.
"Company-specific execution issues drove underperformance," he wrote in a research note Wednesday.
Brocade was also moving to make its own branded IP products rather than make products sold under other brands, "an area of limited experience for the company," Theodosopoulos wrote.
The downgrade was "due to disappointing IP execution, lack of revenue catalysts and material strategy changes," he wrote. He set a $6 price target on the shares, down from $10 previously.
IP or Internet protocol is a basic part of the Internet. It allows information to travel from one network to another.
Brocade shares rose 9 cents to close at $5.45 on Wednesday following a 23 percent drop on Tuesday.
Brocade on Monday posted a fiscal first-quarter profit of $51.1 million, or 11 cents per share, reversing a loss of $23.9 million, or 6 cents per share, in the same period a year earlier. Revenue rose 25 percent to $539.5 million from $431.6 million.
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