Revenue for the third quarter declined 1.2% year-over-year to $1.61 billion, which fell short of the Zacks consensus estimate of $1.64 billion. The decline stemmed mostly from a 22.3% drop in original equipment manufacturer revenues, which outweighed the 1.8% increase in Branded revenues.
NetApp also expects revenue of $1.62 billion to $1.75 billion for the fourth-quarter, compared with the Zacks consensus estimate of $1.74 billion; however, the company expects non-GAAP earnings per share of 77 to 82 cents, up from 69 cents one year ago. This would surpass the Zacks consensus estimate of 63 cents.
"We are pleased with our strong operational execution again this quarter," said President and CEO Tom Georgens in the company's statement. "With our strategy of delivering best-of-breed cloud-integrated and flash-accelerated solutions and our unique ability to manage data seamlessly across on- and off-premise environments, we are well positioned to create ongoing opportunity in the evolving IT landscape."
TheStreet Ratings team rates NETAPP INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NETAPP INC (NTAP) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."