Shares of enterprise storage and data management solutions provider NetApp (NTAP -0.16%) soared 31.3% in August, according to data provided by S&P Global Market Intelligence. The jump was driven by a strong fiscal first-quarter report, with the company beating analyst estimates across the board.
NetApp reported first-quarter revenue of $1.29 billion, down 3% year over year but $30 million higher than the average analyst estimate. Product and software maintenance revenue declined slightly year over year, while hardware maintenance and other services revenue dropped by 7%. Despite the revenue decline, deferred revenue and financed unearned services revenue rose 8% year over year.
Non-GAAP EPS came in at $0.46, up from $0.29 during the prior-year period and $0.10 better than analysts were expecting. On a GAAP basis, NetApp reported EPS of $0.23, up from a loss of $0.10 during the same period last year. The main driver of the earnings growth was a steep drop in operating expenses. GAAP sales and marketing expense was reduced by 12.8% year over year, while research and development expense declined by 15.2%.
NetApp CEO George Kurian summed up the quarter:
We are pleased with our first quarter results. Our focus on disciplined execution of our strategy is yielding results and starting to change the trajectory of our business. We remain sharply focused on operating more efficiently while delivering market-leading innovations that are aligned to our customers' business and IT transformation priorities.
NetApp expects another revenue decline during the second quarter, calling for revenue $1.265 billion to $1.415 billion. That compares to revenue of $1.45 billion during the second quarter of last year. Non-GAAP EPS is expected to be $0.51 to $0.56, down from $0.61.
While NetApp reported another revenue decline during the first quarter, better-than-expected earnings were enough to send the stock much higher in August.