The company, which provides storage systems and data management solutions for IT infrastructures, is expected by analysts to post earnings per share of 70 cents on revenue of $1.55 billion for the most recent quarter.
For the fiscal 2014 second quarter NetApp said its diluted earnings per share results were 48 cents, on revenue of $1.54 billion. These results increased over the previous fiscal year's second quarter.
Shares of NetApp are down by 0.19% to $42.19 in early afternoon trading on Wednesday.
Separately, 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 impressive record of earnings per share growth, expanding profit margins, increase in stock price during the past year, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NETAPP INC has improved earnings per share by 17.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NETAPP INC increased its bottom line by earning $1.85 versus $1.37 in the prior year. This year, the market expects an improvement in earnings ($3.01 versus $1.85).
- The gross profit margin for NETAPP INC is rather high; currently it is at 68.20%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NTAP's net profit margin of 5.93% significantly trails the industry average.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Computers & Peripherals industry average. The net income increased by 8.3% when compared to the same quarter one year prior, going from $81.60 million to $88.40 million.
- Despite currently having a low debt-to-equity ratio of 0.39, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.56 is very high and demonstrates very strong liquidity.
- You can view the full analysis from the report here: NTAP Ratings Report