What happened

Shares of NetApp (NASDAQ:NTAP) fell as much as 14.2% lower on Thursday morning, following the release of the data storage expert's third-quarter results. As of 10:00 AM EST, the stock had made a modest recovery to trade 12.6% lower instead.

So what

Top-line revenues rose 9% year over year to $1.52 billion, just above the Street's $1.5 billion consensus estimates. On the bottom line, adjusted earnings landed at $0.99 per share, a 21% year-over-year improvement. Here, analysts had been looking for a $0.91 profit per share. The revenue result was above the midpoint of management's guidance for the quarter; Earnings rose above $0.94, the top end of the official guidance range.

Looking ahead, NetApp's fourth-quarter guidance was in line with current analyst expectations.

A traditional hard drive, case flung open and a screwdriver is scratching the magnetic disc.

Image source: Getty Images.

Now what

Merely adequate guidance wasn't enough to impress investors this time. Looking back to the second-quarter earnings release, shares jumped 17% higher on a beat-and-raise report that exceeded analyst views in both the present and future tenses.

NetApp's healthy results tap into the booming markets for cloud computing and large-scale data analysis. I would argue that today's pullback is a mistake. NetApp shares are now trading at just 16 times trailing earnings and 14 times forward estimates.