NetApp Inc. (NTAP) shares declined in the extended session Wednesday after the cloud-based data-services company’s forecast came in light as weak business spending poses a challenge. The stock fell as much as 5% after hours, following a 0.2% decline in the regular session to close at $65.83.
NetApp forecasted adjusted earnings of $1.30 to $1.40 a share on revenue of $1.48 billion to $1.63 billion for the fourth quarter, and $5.30 to $5.55 a share for the year. This was lower than what analysts surveyed by FactSet had estimated, which was $1.43 a share on revenue of $1.66 billion for the fourth quarter, and $5.41 a share for the year.
The company reported fiscal third-quarter net income of $65 million, or 30 cents a share, compared with $252 million, or $1.10 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.37 a share, compared with $1.44 a share in the year-ago period, while revenue fell to $1.53 billion from $1.61 billion in the year-ago quarter. Analysts had forecast $1.28 a share on revenue of $1.61 billion.
Commenting on the results, NetApp chief executive George Kurian said, “In Q3, we executed well on the elements under our control in the face of a weakening IT spending environment and continued cloud cost optimization. We are confident that we remain well positioned to take advantage of the secular growth trends of data-driven digital and cloud transformations. Building on that solid foundation, we are sharpening our execution to accelerate near-term results while strengthening our position when the spending environment rebounds.”
The global economic slowdown has had a major impact on business spending, particularly in the IT sector. Businesses are cutting back on spending as they struggle to adjust to the new normal. This has had a direct impact on companies like NetApp, which provides cloud-based data services.
NetApp has been actively trying to adjust to the new environment by focusing on the elements that it can control. It has sharpened its execution to accelerate near-term results and strengthen its position when the spending environment rebounds.
The company has also been leveraging its strong position in the market to take advantage of the secular growth trends of data-driven digital and cloud transformations. It is also investing in product innovation and expanding its customer base to drive long-term growth.
NetApp is confident that it will be able to navigate the current economic environment and emerge stronger in the long run. It is committed to delivering value to customers and shareholders, and is confident that its strategy will help it achieve its long-term goals.
In conclusion, NetApp Inc. shares declined in the extended session Wednesday after the cloud-based data-services company’s forecast came in light as weak business spending poses a challenge. Despite the slowdown, NetApp is confident that it will be able to navigate the current environment and emerge stronger in the long run. It is investing in product innovation and expanding its customer base to drive long-term growth and deliver value to customers and shareholders.
