Network Appliance Beats, Buys Back $1 Billion

Updated from 4:39 p.m. EDT

SAN FRANCISCO -- Shares of beleaguered Network Appliance (NTAP Quote - Cramer on NTAP - Stock Picks) surged after the company reported first-quarter earnings and revenue above analysts' revised forecasts and greatly expanded its stock buyback plan.

The company also issued second-quarter guidance above Street estimates.

The data storage device maker said Wednesday that net income fell to $34 million, or 9 cents a share, down from $55 million, or 14 cents a share, a year ago.

Excluding nonoperating costs and stock-based compensation expenses, the company earned 20 cents a share, beating analysts' average forecast by a penny.

Revenue rose 11% to $689 million, edging past Thomson First Call analysts' forecasts, thanks to strength in Europe, where revenue rose 32%.

In recent after-hours trading, shares rose nearly 6% to $25.50.

In the second quarter, Network Appliance expects to earn between 24 cents and 26 cents a share, excluding certain items. The midpoint of that range is above analysts' consensus estimate of 24 cents.

The company has pegged second-quarter revenue between $752 million and $768 million, also above analysts' estimates.

The results follow the company's announcement earlier this month that first-quarter revenue and earnings would fall far short of its previous guidance because of sluggish sales to large U.S. customers.

At the time, the company blamed weak spending from companies in the financial services, manufacturing, life sciences and pharmaceutical industries. Overall, large deals fell 27% from the previous quarter.

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