NetApp Profit Rises 22% on Lower Costs

   By Erin McCarthy 
 

NetApp Inc. (NTAP) said its fiscal third-quarter earnings rose 22% as lower revenue costs and operating expenses help offset a slight decline in the data-storage company's revenue.

NetApp builds systems that store and manage clients' digital information, a market that has wavered over the past year as corporations' once-surging demand for storage hardware cools. Companies are increasingly looking to use the public cloud for data and workload management, raising challenges for companies that build data-storage systems.

For the quarter ended Jan. 24, NetApp reported a profit of $192.1 million, or 55 cents a share, up from $158.1 million, or 43 cents a share, a year earlier.

Excluding stock-based compensation and other items, per-share earnings rose to 75 cents from 67 cents.

Revenue edged down 1.2% to $1.61 billion.

The company in November forecast adjusted earnings of 68 cents to 73 cents a share on revenue of $1.575 billion to $1.675 billion.

Product sales, which make up the bulk of revenue, fell 4.3%.

Software revenue edged down 0.7% while service revenue climbed 8%.

For the current quarter, the company sees adjusted earnings of 77 cents to 82 cents a share and revenue of $1.62 billion to $1.72 billion. Analysts polled by Thomson Reuters recently projected per-share earnings of 80 cents and revenue of $1.735 billion.

Shares fell about 3% in after-hours trading. As of the close, the stock has risen 6% in the last three months.

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