NetApp Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: NetApp (Nasdaq: NTAP  ) dropped 14% in intraday trading today after issuing a disappointing earnings report and outlook and announcing its CFO will retire at year's end.

So what: Non-GAAP EPS of $0.55 rose 12% year over year and met the consensus estimate. GAAP EPS of $0.34 fell from $0.40 in the year-ago quarter. Revenue of $1.46 billion grew 26% year over year, but came in below the consensus forecast of $1.51 billion. NetApp had beaten the consensus non-GAAP EPS estimate for the previous nine quarters, so just meeting expectations is a disappointment.

Now what: Even worse, business "softened dramatically" toward the end of July. The year-over-year growth rate for July was half May's pace, because of weak sales to the U.S. federal sector. Bookings with large financial institutions also dropped in July. For the current quarter, management said it expects revenue of $1.5 billion to $1.6 billion, below the consensus forecast of $1.61 billion, and non-GAAP diluted EPS of $0.58 to $0.62, compared to the consensus estimate of $0.61. Questions on the conference call centered on fears that this may signal the beginning of another broad economic slowdown.

Interested in more info on NTAP? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1540540, ~/Articles/ArticleHandler.aspx, 9/21/2014 8:27:14 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement