The 10-second takeaway
For the quarter ended Oct. 26 (Q2), NetApp met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share dropped significantly.
Margins dropped across the board.
NetApp recorded revenue of $1.54 billion. The 34 analysts polled by S&P Capital IQ anticipated revenue of $1.54 billion on the same basis. GAAP reported sales were 2.3% higher than the prior-year quarter's $1.51 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.51. The 37 earnings estimates compiled by S&P Capital IQ forecast $0.48 per share. GAAP EPS of $0.30 for Q2 were 32% lower than the prior-year quarter's $0.44 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 59.3%, 130 basis points worse than the prior-year quarter. Operating margin was 8.8%, 410 basis points worse than the prior-year quarter. Net margin was 7.1%, 390 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.61 billion. On the bottom line, the average EPS estimate is $0.55.
Next year's average estimate for revenue is $6.35 billion. The average EPS estimate is $2.09.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 568 members out of 642 rating the stock outperform, and 74 members rating it underperform. Among 152 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 132 give NetApp a green thumbs-up, and 20 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 $36.67.
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