NetApp Q1 Top Estimates

(RTTNews) - NetApp Inc (NTAP) on Wednesday reported an increase in first-quarter profit as expenses declined, offsetting a drop in revenue. Both earnings and revenue for the quarter topped Wall Street estimates.

Moving forward, the data-storage systems maker provided its guidance for the second quarter, almost in line with analysts' estimates.

"Our best-in-class portfolio is driving momentum, enabling us to invest in continued innovation while delivering shareholder value," said CEO Tom Georgens.

NetApp shares gained about 2 percent in the initial after-hours trade on the Nasdaq, but later pulled back.

NetApp, based in Sunnyvale, California, posted first quarter net earnings of $88.4 million or $0.27 per share, compared with $81.6 million or $0.23 per share last year.

Excluding items, adjusted earnings for the quarter were $0.60 per share, compared with $0.53 per share a year ago.

On average, 35 analysts polled by Thomson Reuters expected earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the first quarter declined to $1.49 billion from $1.52 billion in the prior year. Thirty-two analysts had a consensus revenue estimate of $1.47 billion.

Among segments, product revenue slid to $882.6 million from $930.8 million last year, and software entitlements and maintenance revenue slipped to $221.3 million from $228.5 million. Service revenue climbed to $385.3 million from $357 million a year ago.

Results were mainly helped by cost of product revenue that decreased by $56 million, while the prior year included restructuring charges of $48.4 million.

For the second quarter, NetApp projects adjusted earnings of $0.66 to $0.71 per share and revenue of$1.49 billion to $1.59 billion. Analyst currently expect earnings of $0.69 per share on revenue of $1.53 billion for the quarter.

NTAP closed Wednesday at $39.30, up $0.01 or 0.03%, on a volume of 1.81 million shares on the Nasdaq. In after hours, the stock gained $0.21 or 0.53%.