Network Appliance Taken Apart

Updated from 5:14 p.m. EDT

Shares of Network Appliance (NTAP Quote) sank late Thursday after the data-storage device maker lowered its revenue and profit estimates for the quarter that ended last month.

In a statement released after the markets closed, Network Appliance said first-quarter revenue would fall in the range of $684 million to $688 million. In May, the company had estimated it would have $745 million to $753 million.

The company blamed soft tech spending in the U.S. and U. K., namely from customers in financial services, manufacturing, telecommunications and life sciences.

Network Appliance also said it expects earnings to be 19 cents to 20 cents a share, excluding one-time items, down from its previous range of 24 cents to 25 cents and below analysts' average estimate of 25 cents.

The company's shares were recently diving $5.32, or 18.5%, to $23.39 in extended trading.

"We are disappointed with our [fiscal first-quarter] results. We believe our performance was impacted by some continued softness in enterprise storage spending, most notably in our existing customer accounts in the U.S. and parts of Europe," said Chief Executive Dan Warmenhoven in a statement.

In a conference call after the announcement, Warmenhoven said that some customers have curbed spending because past purchases left them with excess storage capacity. Others, he said, have become "very conservative" because of fears that the weak real estate sector would dampen economic growth.