Technology
What Is Driving Analysts Away From NetApp After Earnings
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NetApp Inc. (NASDAQ: NTAP) caused some waves this past week. On top of lower-than-expected revenues, NetApp announced that it plans to slash about 12% of its workforce in an effort to lower costs. It seems that the endless amounts of storage being bought might not be as endless as many investors historically have been led to believe.
NetApp’s revenues were down over 10% to $1.39 billion and were shy of the $1.45 billion consensus estimate. Its $153 million in net income generated $0.52 in earnings per share, down from $0.56 per share, or $177 million, a year ago. If you back out the extraordinary items, NetApp’s operating earnings of $0.70 per share were actually two cents above estimates.
What hurt here, and what is driving analysts away, is that this was the third weak revenue report. Investors need to remember that technology analysts and investors like growth, particularly if it pertains to technology giants.
NetApp’s nearly 13,000 workers will have to wait to see who all gets fired, and if those terminations are inside of its recent acquisition of SolidFire.
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