NetApp (NTAP) Beats On Q4 Earnings & Revenues, View Tepid
Zacks Investment Research | May 25, 2017 01:27AM ET
NetApp Inc. (NASDAQ:NTAP) reported fourth-quarter fiscal 2017 non-GAAP earnings (including stock-based compensation) of 72 cents per share, beating the Zacks Consensus Estimate by 4 cents.
Earnings (excluding stock-based compensation) surged 56.4% from the year-ago quarter and almost 5% sequentially to 86 cents. The figure was better than management’s guided range of 79–84 cents per share. The upside was primarily driven by strong top-line growth along with margin expansion.
Revenues increased 7.3% from the year-ago quarter and 5.5% from the previous quarter to $1.48 billion, surpassing the Zacks Consensus Estimate of $1.44 billion. The figure was within management’s guided range of $1.365–$1.515 billion.
However, first-quarter fiscal 2018 guidance was unimpressive due to seasonality. We believe that this will keep the share price under pressure. Notably, NetApp has return 12.1% as compared with S&P 500’s gained of 7.7% on a year-to-date basis.
In-Line SolidFire Revenue, Lower Costs Drove FY17 Results
In fiscal 2017, revenues declined almost 0.5% over fiscal 2016 to $5.52 billion. However, management noted revenue contribution from SolidFire was in line with expectation but was significantly less dilutive to overall operating results. This positively impacted profitability.
Earnings surged 28.2% to $2.73 per share driven by improving operating margins, which reflected benefits from lower costs. NetApp stated that it “overachieved” its goal of delivering a net run rate savings of almost $130 million in operating expenses and cost of sales.
NetApp, Inc. Price, Consensus and EPS Surprise
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Long-term earnings growth rate for Quantum and Western Digital are pegged at 20% and 4.75%, respectively.
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