Last night's earnings report from NetApp
There was nothing wrong with the numbers, per se, with earnings of $0.26 per share on $938 million in sales. That's 17% year-over-year revenue growth and 13% higher earnings per share, and the updated guidance points to 23%-27% revenue growth in the next quarter. That's accelerating sales despite a tough market environment.
The bad news was the short-term earnings forecast. To snag market share from storage-software leader EMC
Adding staff costs money, so the company is sacrificing short-term earnings in exchange for a long-range opportunity. The next quarterly profit is supposed to land at $0.20 to $0.23 per share, about even with last year. As long as virtual server specialist VMware
Just keep an eye on VMware, and if that company's sales growth ever hits a brick wall (analysts currently expect around 50% annual improvements), it might be time to get out of NetApp, too -- if that happens in the next couple of years, but that's far from a sure thing.
In the meantime, long-term investors can enjoy these discounted shares, thanks to short-term traders who don't like to focus beyond the next quarter or two.