What happened

Shares of NetApp Inc. (NASDAQ:NTAP) declined 11% in the month of August, according to data provided by S&P Global Market Intelligence, despite a solid quarterly report from the enterprise storage specialist.

More specifically, NetApple's revenue for its fiscal first-quarter of 2018 (ended July 28, 2017) climbed 3.1% year over year to $1.33 billion and translated to 36% growth in adjusted earnings per share to $0.62. Analysts, on average, were only expecting revenue of $1.32 billion to result in adjusted earnings of $0.55 per share.

Nonetheless, NetApp stock plunged nearly 7% the following day in response.

Red and green LED display showing stock market data

IMAGE SOURCE: GETTY IMAGES

So what

NetApp elaborated that within its top line, product revenue climbed 10% year over, and the annualized run rate for all-flash array revenue skyrocketed 95%. 

"Customers and industry leaders are excited by our strategic direction and are choosing NetApp as their partner for data driven digital transformations," added NetApp CEO George Kurian. "We are building on a strong foundation and are, without question, the best positioned and the best executing company in the industry."

But why the subsequent decline? For one, it's worth noting that NetApp stock was already up more than 24% year to date at the start of last month. So it seems likely that its drop was partly due to investors taking some of their profits off the table.

Now what

Looking to the current fiscal second quarter, NetApp told investors to expect revenue in the range of $1.31 billion to $1.46 billion, the midpoint of which would represent steady 3.4% growth from the same year-ago period. That should translate to adjusted earnings per share in the range of $0.64 to $0.72, up from $0.60 per share in last year's fiscal Q2.

All told, NetApp overdelivered on its promises to investors last month, and continues to enjoy broad-based strength and momentum as more customers adopt its solutions. Thus, I'm inclined to think this will be a temporary pause in NetApp stock's longer-term upward trajectory.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.