SUNNYVALE, Calif. ( TheStreet) -- Storage company NetApp's ( NTAP) strong first-quarter results provide yet more evidence that IT spending is creeping back, although the company's shares plunged in Thursday trading. Tech has been challenging Brett Favre in the comeback stakes recently with plenty of chatter about a spending rebound. NetApp, however, was unwilling to give any hostages to fortune when it released its results after market close Wednesday. Despite comfortably beating analysts' estimates, NetApp declined to provide second-quarter sales guidance, which appears to be weighing heavily on investors. The Sunnyvale, Calif.-based firm also announced that COO Tom Georgens had replaced Dan Warmenhoven as CEO as part of a "planned transition" which sees Warmenhoven become the company's executive chairman. The market was underwhelmed by the news. NetApp's shares fell $1.09, or 4.78%, to $21.79, reversing the modest gain in tech stocks that saw the Nasdaq rise 0.59%. Investors may also be spooked by NetApp's first-quarter operating expenses, according to Wedbush Morgan analyst Kaushik Roy. The company's OPEX came in at $444 million, above NetApp's own guidance, although Roy thinks that this should stabilize during the coming months. "
The sudden increase in opex in FQ1 could be concerning to investors, but opex should return to a more normal level in the next few quarters," he wrote, in a note released Thursday. On a conference call late Wednesday, for example, NetApp indicated that they would not make any significant hiring until the company gets to its target operating margin of 15%-16%.