And indeed it was: $1.17 billion in revenue and $0.40 of GAAP earnings per share easily bested Wall Street estimates while representing growth of 33% and 90% year-over-year, respectively. Sales of new storage systems saw a 50% annual boost, which should translate into higher sales of software and services in coming quarters. It looks like NetApp is stealing market share from mortal rivals EMC
Unlike Brocade Communications Systems
But as I said, VMware is the big kahuna in NetApp's surf. "Roughly 1/3 of our current installed base is supporting virtualized environments," says CEO Tom Georgens. "It was not that long ago when people were questioning whether server virtualization was a potential threat to NetApp, when we were in fact the first to recognize the impact of this trend on storage and are now the acknowledged innovation leader in storage for virtualized infrastructures."
NetApp looks a bit expensive today, thanks to that tremendous overnight rocket launch. But there is no doubt that the company is positioned beautifully to take advantage of a virtualized IT world, and I'm actually surprised that EMC isn't doing more to kick its own business in virtual computing storage into shape. But NetApp is hiring sales staff and moving to make the most of this unique point in storage history.
Is NetApp too expensive now, or did the stock simply get a well-deserved bucket of reality dumped on its head? I'm leaning toward the latter, but please discuss in the comments below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. VMware is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.