NetApp Profit Rises on Lower Expenses

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   By Asma Ghribi 
 

NetApp Inc. (NTAP) said its fiscal fourth-quarter profit rose 13%, as lower costs and expenses masked a dip in revenue.

For the fiscal first quarter, NetApp forecast adjusted per-share earnings of 53 cents to 58 cents, and revenue of $1.42 billion to $1.52 billion. Analysts polled by Thomson Reuters had expected earnings of 62 cents a share and revenue of $1.52 billion.

The company also increased its quarterly dividend to 16.5 cents a share from 15 cents.

NetApp, which builds storage and data management solutions for its clients, has been facing an increasingly challenging business environment because of continuing competition from flash memory and the cloud.

NetApp's strategy over the last quarters was to try to deliver cloud-integrated, flash-accelerated storage and data-management solutions to meet customers' infrastructure requirements.

For the quarter ended April 25, NetApp reported a profit of $197 million, or 59 cents a share, versus a year-earlier profit of $173.8 million, or 47 cents a share. Excluding stock-based compensation and other items, adjusted per-share earnings were 84 cents, up from 69 cents a year earlier. Revenue fell 3.9% to $1.65 billion.

The company in February had forecast adjusted per-share earnings of 77 cents to 82 cents, and revenue of $1.62 billion to $1.72 billion.

Total operating expenses fell 1.2% to $818.2 million.

Product sales, the major contributor to the company's top line, decreased 8.3% to $1.04 billion.

Software revenue was essentially flat at $227.5 million and service revenue climbed 7.7% to $378.7 million.

Write to Asma Ghribi at [e-mail]

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