Storage specialist NetApp
The stock has been swooning for three months, ever since management laid out some weak fourth-quarter guidance. Now the numbers are in, and they're not only better than the company itself expected but also above the original analyst consensus that set the bar for disappointment.
NetApp delivered non-GAAP earnings of $0.59 per share on $1.43 billion in revenue. That's roughly 30% revenue growth and 18% higher earnings year-over-year and -- like I said -- far ahead of all available estimates. Even the most optimistic of 33 analysts expected a little bit less.
So why the shocking results? CFO Steve Gomo explained that the supply constraints he saw at the start of the quarter evaporated later on, bringing NetApp to a strong finish. There was also the adoption of new accounting standards for revenue, which helped fuel the outsized revenue gains. That goes a long way toward explaining the surprise. All of NetApp's major competitors already adopted this change last year, when it gained brief fame as a booster for companies like Apple who collect a lot of sales under long-term contracts. Now it's an even playing field.
And finally, NetApp's shares were cheap this quarter, which reduced the dilutive effect of warrants and convertible debt notes. That effect is the opposite of the bottom-line damage Universal Display
In a quarter like this, many a management team would claim huge gains in market share, particularly versus their main rivals. NetApp is a bit classier than that.
CEO Tom Georgens noted that his company is holding its own against new products from chief competitor EMC
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