This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

NetApp Shares Nudge Lower on Job Cuts

Stocks in this article: NTAP EMC HPQ

NEW YORK (TheStreet) -- Shares of NetApp (NTAP) nudged lower in early trading on Thursday after the storage networking specialist announced plans to cut 600 jobs, or around 6% of its work force.

NetApp shares were off 0.77% at $37.56 shortly after market open, and have slipped 5.7% during the last three months.

The company had 12,680 employees at the end of its most recent fiscal quarter.

The Sunnyvale, Calif.-based firm announced the "business realignment plan" in a filing with the Securities and Exchange Commission on Wednesday, highlighting a constrained IT spending environment. NetApp expects that the restructuring will be implemented through the end of the first quarter of its fiscal 2015 period.

The company, which is currently in the fourth quarter of its fiscal 2014, expects to incur charges of around $35 million to $45 million for the headcount reduction. NetApp expects to incur most of these charges during its current quarter.

"NTAP has historically been reluctant to reduce headcount when it viewed weaker IT spending as temporary," wrote ISI Group Analyst Brian Marshall, in a note.

NetApp, which competes with EMC (EMC) and HP (HPQ), missed wall Street's revenue estimate when it reported its fiscal third-quarter results last month. During its earnings conference call, the company noted "downward pressure" in federal IT spending, which pushed its U.S. public sector revenue down 13% from the prior year's quarter.

"While we would be careful to interpret the headcount reduction as signaling incremental weakness since the February conference call, it suggests NTAP hasn't yet seen an uptick in its core business," wrote ISI Group's Marshall, who nonetheless maintained his 'buy' rating on the stock. "Sales growth remains sluggish but we believe take-out value provides a floor and new product introductions could invigorate growth in the 2H."

-- Written by James Rogers in New York.

>Contact by Email.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs