NetApp Hits Estimates, but GAAP Results Lag Last Year's

NetApp (Nasdaq: NTAP  ) reported earnings on Feb. 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 27 (Q3), NetApp met expectations on revenues and earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share contracted significantly.

Margins contracted across the board.

Revenue details
NetApp booked revenue of $1.57 billion. The 30 analysts polled by S&P Capital IQ predicted net sales of $1.56 billion on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $1.27 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.58. The 32 earnings estimates compiled by S&P Capital IQ forecast $0.58 per share on the same basis. GAAP EPS of $0.32 for Q3 were 24% lower than the prior-year quarter's $0.42 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 58.0%, 700 basis points worse than the prior-year quarter. Operating margin was 10.2%, 550 basis points worse than the prior-year quarter. Net margin was 7.6%, 600 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.69 billion. On the bottom line, the average EPS estimate is $0.63.

Next year's average estimate for revenue is $6.22 billion. The average EPS estimate is $2.38.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 578 members out of 650 rating the stock outperform, and 72 members rating it underperform. Among 192 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 177 give NetApp a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NetApp is outperform, with an average price target of $46.54.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. 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.


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