SUNNYVALE, Calif. -- Storage company NetApp ( NTAP) blew past analysts' estimates in its first-quarter results Wednesday, and, in a surprise move, announced that it has swapped out its CEO. NetApp posted first-quarter revenue of $838 million, down 4% on the same period last year, but well above analysts' estimate of $828.3 million. Excluding items, NetApp earned 22 cents a share on net income of $76 million, flat compared to the prior year's quarter, but comfortably beating analysts' estimate of 20 cents a share. The company also announced that its COO Tom Georgens has taken the company's reins from Dan Warmenhoven, who now becomes NetApp executive chairman. In a statement, the firm described the move as a "planned transition" and explained that Warmenhoven will now build and expand NetApp's links with service providers and other technology partners. "I have had a long-time goal to transition out of the CEO role before I turn 60, which is about five quarters from now," said Warmenhoven, during a conference call after market close. "Tom is absolutely the right person to succeed me." NetApp, which recently lost out to rival EMC ( EMC) in the battle to acquire Data Domain ( DDUP), is nonetheless seen as one of tech's rising stars. "Given the economic backdrop, NetApp performed well in the first quarter," said Georgens, in a statement released after market close. "With year-over-year growth roughly flat on a constant currency basis, our revenue performance clearly outpaced the storage industry at large." Including items, NetApp grew its first-quarter profit, earning 15 cents a share on net income of $52 million, up from 10 cents a share and $35 million in the prior year's quarter. On a non-GAAP basis, NetApp expects second-quarter gross margins between 62.5% and 63%. The storage maker did not, however, provide second-quarter revenue guidance, citing lake of macroeconomic visibility.
Analysts surveyed by Thomson Reuters expect NetApp to bring in second-quarter revenue of $862.23 million and earnings of 30 cents a share, although Goldman Sachs predicts that this could be $874 million and 32 cents a share. "NetApp appears to be shifting its focus back to growth," wrote Goldman Sachs David Bailey, in a note released Wednesday, after market close. "
First quarter revenue upside was driven by stronger product sales, likely providing another indication that demand is leveling out." Shares of NetApp dipped 94 cents, or 4.11%, to $21.95 in extended trading. Written by James Rogers in New York