What happened
Shares of NetApp (NTAP 2.41%) soared 17.6% higher just before 10 a.m. EST on Thursday. The data storage and analysis expert reported fiscal second-quarter earnings Wednesday night, crushing Wall Street's estimates across the board.
So what
NetApp's second-quarter sales rose 6% year over year to land at $1.42 billion. Adjusted earnings surged 35% higher to $0.81 per share. The average analyst would have settled for earnings of $0.69 per share on revenue near $1.38 billion.
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Now what
This surprise was driven by strong sales of flash-based storage arrays and cloud-based data analytics tools. These high-growth product lines, which NetApp's management refers to as "strategic solutions," saw 23% year-over-year sales growth and accounted for 69% of the company's overall product sales in this quarter.
Looking ahead, NetApp expects adjusted third-quarter earnings of roughly $0.90 per share on revenue in the neighborhood of $1.50 billion. Both of these targets are well ahead of Wall Street's consensus projections, which call for earnings of $0.85 per share on sales near $1.44 billion.
It's no surprise to see the stock surging on a classic beat-and-raise performance.
NetApp shares remain affordable, trading at 26 times trailing earnings even after recording a market-stomping gain of 51% in 2017.
