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November 17, 2010, 5:20 PM EST
By Dina Bass
(Adds net income in sixth paragraph.)
Nov. 17 (Bloomberg) -- NetApp Inc., a maker of data-storage products, fell 6.5 percent after its third-quarter profit forecast fell short of analysts’ estimates, fueling concern that a recent surge in storage spending is losing steam.
Excluding some costs, earnings will be 48 cents to 50 cents this quarter, the Sunnyvale, California-based company said today in a statement. Analysts had projected 51 cents, according to data compiled by Bloomberg. Sales will be $1.24 billion to $1.29 billion, in line with analysts’ estimates.
NetApp is the third-biggest seller of external computer- storage systems -- technology that helps companies store information more efficiently while letting them access the data from anywhere. The company has benefited from a rebound in information-technology spending, though that growth is projected to slow next year. Corporate technology spending will rise 4 percent in 2011, from an estimated 7 percent this year, according to Goldman Sachs Group Inc.
The company also faces mounting competition from EMC Corp., which bulked up in storage this week with the $2.25 billion acquisition of Isilon Systems Inc. NetApp ranks behind EMC and International Business Machines Corp. in external-storage sales, according to IDC.
NetApp declined $3.44 to $49.25 as of 4 p.m. New York time on the Nasdaq Stock Market. The shares have risen 43 percent this year.
In the fiscal second quarter, NetApp’s net income rose 72 percent to $164.6 million, or 42 cents a share, from $95.7 million, or 27 cents, a year earlier. Excluding some costs, profit was 52 cents a share, topping the 49-cent average estimate of analysts. Sales climbed 33 percent to $1.21 billion in the period, which ended Oct. 29.
--Editors: Nick Turner, Tom Giles
To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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(Adds net income in sixth paragraph.)
Nov. 17 (Bloomberg) -- NetApp Inc., a maker of data-storage products, fell 6.5 percent after its third-quarter profit forecast fell short of analysts’ estimates, fueling concern that a recent surge in storage spending is losing steam.
Excluding some costs, earnings will be 48 cents to 50 cents this quarter, the Sunnyvale, California-based company said today in a statement. Analysts had projected 51 cents, according to data compiled by Bloomberg. Sales will be $1.24 billion to $1.29 billion, in line with analysts’ estimates.
NetApp is the third-biggest seller of external computer- storage systems -- technology that helps companies store information more efficiently while letting them access the data from anywhere. The company has benefited from a rebound in information-technology spending, though that growth is projected to slow next year. Corporate technology spending will rise 4 percent in 2011, from an estimated 7 percent this year, according to Goldman Sachs Group Inc.
The company also faces mounting competition from EMC Corp., which bulked up in storage this week with the $2.25 billion acquisition of Isilon Systems Inc. NetApp ranks behind EMC and International Business Machines Corp. in external-storage sales, according to IDC.
NetApp declined $3.44 to $49.25 as of 4 p.m. New York time on the Nasdaq Stock Market. The shares have risen 43 percent this year.
In the fiscal second quarter, NetApp’s net income rose 72 percent to $164.6 million, or 42 cents a share, from $95.7 million, or 27 cents, a year earlier. Excluding some costs, profit was 52 cents a share, topping the 49-cent average estimate of analysts. Sales climbed 33 percent to $1.21 billion in the period, which ended Oct. 29.
--Editors: Nick Turner, Tom Giles
To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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