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November 18, 2010, 1:26 PM EST
By Dina Bass and Nick Turner
(Adds share performance starting in first paragraph.)
Nov. 18 (Bloomberg) -- NetApp Inc., a maker of data-storage products, jumped as much as 8.8 percent on the Nasdaq Stock Market after analysts recommended the stock, allaying concern that growth was slowing at the company.
Paul Mansky at Canaccord Genuity raised his rating to “buy” from “hold,” and at least five analysts increased their targets for the stock price over the next year. NetApp climbed $3.60 to $52.85 at 1:21 p.m. New York time, and reached $53.57 earlier in the biggest gain in almost six months. It had risen 43 percent this year before today.
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 remains a “fast-growing, well- positioned” competitor with a cost-effective product, said Brian Marshall, an analyst at Gleacher & Co. in San Francisco.
While the company expects its operating profit margins to drop this quarter from the previous period, they remain above its targets, Chief Executive Officer Tom Georgens said yesterday on a conference call. NetApp also is taking market share from competitors, he said.
Decade High
“We have been gaining share at rates faster than any time in the last decade,” Georgens said on the call. “We expect to continue to gain share in good markets or bad.”
NetApp stock had declined yesterday after the company’s profit forecast missed analysts’ estimates. Excluding some costs, earnings will be 48 cents to 50 cents this quarter, the Sunnyvale, California-based company said 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 estimates.
EMC Corp., the largest maker of storage, announced plans this week to buy Isilon Systems Inc. for $2.25 billion -- an effort to catch up in a market where NetApp has made gains. NetApp ranks behind EMC and International Business Machines Corp. in total external-storage sales, according to IDC.
In NetApp’s fiscal second quarter, 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: Lisa Wolfson, Nick Turner
To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Nick Turner in San Francisco at nturner7@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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(Adds share performance starting in first paragraph.)
Nov. 18 (Bloomberg) -- NetApp Inc., a maker of data-storage products, jumped as much as 8.8 percent on the Nasdaq Stock Market after analysts recommended the stock, allaying concern that growth was slowing at the company.
Paul Mansky at Canaccord Genuity raised his rating to “buy” from “hold,” and at least five analysts increased their targets for the stock price over the next year. NetApp climbed $3.60 to $52.85 at 1:21 p.m. New York time, and reached $53.57 earlier in the biggest gain in almost six months. It had risen 43 percent this year before today.
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 remains a “fast-growing, well- positioned” competitor with a cost-effective product, said Brian Marshall, an analyst at Gleacher & Co. in San Francisco.
While the company expects its operating profit margins to drop this quarter from the previous period, they remain above its targets, Chief Executive Officer Tom Georgens said yesterday on a conference call. NetApp also is taking market share from competitors, he said.
Decade High
“We have been gaining share at rates faster than any time in the last decade,” Georgens said on the call. “We expect to continue to gain share in good markets or bad.”
NetApp stock had declined yesterday after the company’s profit forecast missed analysts’ estimates. Excluding some costs, earnings will be 48 cents to 50 cents this quarter, the Sunnyvale, California-based company said 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 estimates.
EMC Corp., the largest maker of storage, announced plans this week to buy Isilon Systems Inc. for $2.25 billion -- an effort to catch up in a market where NetApp has made gains. NetApp ranks behind EMC and International Business Machines Corp. in total external-storage sales, according to IDC.
In NetApp’s fiscal second quarter, 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: Lisa Wolfson, Nick Turner
To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Nick Turner in San Francisco at nturner7@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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