NetApp (NTAP) Q2 Earnings Beat, Revenues Miss Estimates
Zacks Investment Research | Nov 13, 2019 10:14PM ET
NetApp, Inc. (NASDAQ:NTAP) reported second-quarter fiscal 2020 non-GAAP earnings of $1.09 per share, surpassing the Zacks Consensus Estimate by 15.96%. Moreover, the figure improved 2.8% from the year-ago quarter. The bottom line also exceeded management’s guided range of 91 cents to 99 cents per share.
Revenues of $1.371 billion lagged the Zacks Consensus Estimate by 1.13%. Moreover, the figure declined 9.6% from the year-ago quarter. Nonetheless, the top line came within the guided range of $1.325-$1.475 billion. The year-over-year decline includes negative impact of around one point of exchange rate fluctuations.
Quarter in Detail
Product revenues (56% of total revenues) decreased 15.6% year over year to $771 billion owing to macroeconomic headwinds.
Per management, broader weakness in macroeconomic environment is compelling enterprises to trim capital expenditure, which is affecting storage business. Moreover, enterprise software license agreements worth $20 million from the year-ago quarter did not get repeated in the reported quarter, and negatively impacted top-line performance.
Revenues from products under Strategic grouping came in at $442 milion, down 8.9% year over year. The offerings include All-flash FAS products, enterprise software license agreements, private cloud solutions, and other add-on hardware and software product options.
Revenues from products under Mature grouping came in at $329 million, down 23.1% year over year. The offerings include Hybrid FAS products, and related add-on OS software and hardware, branded E-Series and OEM products.
Management noted that the combined revenues of Hardware maintenance and Software maintenance amounted to $540 million, flat on a year-over-year basis.
Software Maintenance revenues (19%) came in at $254 million, up 7.6%.
Hardware Maintenance and Other Services revenues (25%) were $346 million, declining almost 6% from the year-ago quarter.
Revenues from Hardware Maintenance Support Contracts came in at $286 million, down 5.6% year over year. Revenues from Professional and Other Services came in at $60 million, down 7.7%.
Region wise, the Americas, EMEA and Asia Pacific accounted for 56%, 29% and 14% of total revenues, respectively.
Direct and Indirect revenues represented 21% and 79%, respectively, in total revenues.
NetApp, Inc. Price, Consensus and EPS Surprise
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