Upbeat Profit Outlook Lifts QLogic’s Stock

QLogic Corp.’s stock hit a 52-week high Wednesday after the company’s president said he expects profits to grow because of increased demand for its products, which speed communications between computers.

“Because processing power goes up, input-output communications becomes a bottleneck,” President H.K. Desai said. A customer like Sun Microsystems Inc., the world’s biggest maker of computer workstations, has to ensure more powerful products can communicate faster.

The stock climbed to $100.50 a share before retreating a bit to close at $99.63, up $5.50. Volume totaled 336,400 shares, up from a daily average of 181,588 over the last three months.

After the market closed, the company announced it will ask shareholders to approve a 2-for-1 stock split, which would make the shares accessible to more investors.

Costa Mesa-based QLogic sells nearly two-thirds of its products to computer makers like Sun, Silicon Graphics Inc. and Compaq Computer Corp., whose products run on the advanced Unix operating system, Desai said. Now it’s also selling to International Business Machines Corp. and Dell Computer Corp., whose smaller computers run on Microsoft Corp.’s Windows NT.

That’s one reason QLogic reported that fiscal second-quarter income before a charge more than doubled to $6.3 million, or 68 cents a share, from $3 million, or 39 cents, a year earlier. Revenue for the period ended Sept. 27 increased 41% to $27.7 million. After a charge to write off research from an acquisition, its net income was $5.3 million, or 57 cents.

Desai, 52, said profit is likely to grow because customers need more products to transmit data over networks and to peripherals such as disk and tape drives.