Brocade Communications Systems Inc. on Thursday reported a fiscal first-quarter loss on heavy legal fees and stock-compensation charges, but adjusted results beat Wall Street estimates.

The San Jose-based maker of networking equipment posted a loss of $26 million, or 7 cents per share, compared with a profit of $19.8 million, or 5 cents per share, in the same quarter a year ago.

The latest quarter included $19 million in legal fees and $4.4 million in acquisition-related financing charges. Excluding those and other items, the company recorded income of 15 cents per share for the quarter ended Jan. 24.

Analysts polled by Thomson Reuters expected profit of 13 cents per share. Analysts typically exclude one-time charges from their estimates.

Brocade's sales rose 24 percent to $431.6 million from $347.8 million. Wall Street predicted $441.7 million in revenue.

Brocade, which competes against Cisco Systems Inc., is selling into a market for networking gear that has been badly hurt by the recession. Cisco, the world's biggest maker of networking gear, reported earlier this month that its orders dropped off 20 percent in January.

Brocade completed its $2.6 billion acquisition of Foundry Networks in December in a deal that ratcheted up the competition with Cisco.

The $19 million in legal fees recorded in Brocade's latest quarter was for the defense of former executives in a stock-options scandal. Brocade's former chief executive, Gregory Reyes, and the former vice president of human resources, Stephanie Jensen, have been convicted of tampering with options awards. They are appealing their cases.

Brocade shares fell 23 cents, or 6.4 percent, to close at $3.38. The stock has ranged from $2.40 to $9.09 over the past year.

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