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.

Anders Bylund 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.