NetApp's Profit Narrows but Beats Expectations Amid Turnaround Effort
17 November 2016 - 9:02AM
Dow Jones News
By Maria Armental
NetApp Inc.'s (NTAP) second-quarter profit results beat
projections as the data-storage company continues to turnaround
operations, sending shares rallying after hours.
For the current quarter, NetApp projects adjusted profit of 72
cents to 77 cents on $1.33 billion to $1.48 billion in revenue.
Analysts surveyed by Thomson Reuters had expected 65 cents on $1.36
billion in revenue.
The Silicon Valley company, which has reported lower profit for
the past two years and falling sales for three years running, has
significantly reduced its payroll as it adjusts to market changes
and lower operating expenses. This month, it disclosed an
additional 6% in job cuts by the end of the current business year.
The bulk of those charges will be booked in the current
quarter.
Operating expenses fell to $687 million in the second quarter,
down 2% from the previous quarter and 7% from the prior-year
period.
Over all, NetApp's profit fell 4% to $109 million, or 38 cents a
share. Excluding stock-based compensation and other items, profit
rose to 60 cents a share from 46 cents a year earlier.
Net revenue fell 7% to $1.34 billion as product revenue, which
accounts for the bulk of its business, declined 13%.
The results, based on 4% fewer shares outstanding, beat profit
and adjusted profit projections while revenue was roughly in line
with expectations.
Gross profit margin improved to 61.9% from 61.2% a year
earlier.
Shares, up 31% this year, rose 8% to $37.62 in after-hours
trading.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
November 16, 2016 16:47 ET (21:47 GMT)
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