SUNNYVALE (dpa-AFX) - Data-storage systems maker NetApp Inc. (NTAP), Wednesday reported a higher second-quarter profit that topped Wall Street estimates, helped by better margins. Revenue for the quarter rose just one percent and missed expectations as demand for its products waned.
The company also provided some soft guidance for the third quarter as market conditions continue to be volatile. The sector itself has had been grappling with competitive environment and pricing pressures.
'Though we face an ongoing uncertain macro environment, our solid branded revenue growth and share gains are evidence of the value customers place on our innovative, best-of-breed solutions,' said CEO Tom Georgens in a statement.
NetApp said its second-quarter revenue edged up to $1.55 billion from $1.54 billion in the prior year. On average, 33 analysts polled by Thomson Reuters estimated revenue of $1.60 billion for the quarter.
Results were impacted by product revenue that slid to $955 million from $996 million last year, while smaller segments of software entitlements and services climbed.
The Sunnyvale, California-based company posted quarterly net earnings of $167 million or $0.48 per share, compared with $110 million or $0.30 per share last year.
Excluding items, adjusted earnings for the quarter were $232 million or $0.66 per share, compared with $189 million or $0.51 per share a year ago.
Analysts had a consensus earnings estimate of $0.63 per share for the quarter. Analysts' estimates typically exclude special items. a year ago.
Adjusted gross margin for the second quarter improved to 63.6 percent from 60.6 percent last year, and operating expenses were almost unchanged at $778 million. Also, interest expense fell to $6.5 million from $20 million last year.
For the third quarter, NetApp expect net earnings in the range of $0.50 to $0.55 per share, adjusted earnings of $0.68 to $0.73 per share and revenue of $1.575 billion to $1.675 billion. Analysts currently expect earnings of $0.73 per share on revenue of $1.69 billion.
NTAP closed Wednesday at $41.29, up $1.09 or 2.71%, on the Nasdaq. In after hours, the stock dropped $0.19 or 0.46% at $41.10.
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