Light Cracks in NetApp Road (NTAP)

NetApp Inc. (NASDAQ: NTAP) was all the buzz during the tech M&A boom of late-Summer.  The storage giant reported that its profit gained over 70%, beating estimates.  Non-GAAP earnings were $0.52 EPS and revenue was $1.21 billion versus prior guidance of $0.47 to $0.50 EPS on $1.16 billion to $1.21 billion in sales.

That is where the trend ends.  Gross margin fell to 66.3% from 66.7% as product sales were up 49%, software rose almost 5% and services rose 16%.

Guidance was $0.48 to $0.50 EPS on revenues of $1.24 to $1.29 billion.  The problem is that Thomson Reuters was showing consensus estimates of $0.51 EPS and $1.26 billion in revenues.

Shares traded down about 6.5% to $49.25 before a quick halt since the release came before the close of the day.  Shares have just re-opened and the after-hours session has shares trading up around $49.90 to $50.00 initially.

JON C. OGG