missed Wall Street's revenue forecasts and swung to a $75 million loss in its third quarter as its customers slowed their tech spending.
The company's third-quarter revenue was $746 million, down from $884 million in the same period last year, although its most recent quarter was impacted by a $128 million accrual related to a dispute with the General Services Administration (GSA). Without the accrual, NetApp would have reported revenue of $874 million, well below analysts' estimate of $913 million.
"Business levels softened in January as many customers' budgets contracted, resulting in lower revenues than we had expected," said NetApp CEO Dan Warmenhoven in a statement.
Keen to put a positive sheen on the results, Warmenhoven explained that NetApp added a record number of new customers during the quarter. "Operationally, the NetApp team also did a stellar job, decreasing non-GAAP operating expenses by $30 million in one quarter," he said.
NetApp's shares plunged $1.20, or 7.89%, to $14 in extended trading as investors digested the company's third-quarter numbers.
Citing reduced visibility, NetApp did not provide formal fourth-quarter revenue guidance. Analysts had estimated fourth-quarter revenue of $927 million.
The company was somewhat more forthcoming on the subject of its fourth-quarter margins, estimating a non-GAAP gross margin of around 60%.
The Sunnyvale, Calif.-based firm posted a loss of 23 cents a share on a net loss of $75 million during its third quarter, compared to a profit of $102 million or 29 cents a share in the same period last year.
Excluding charges, NetApp earned 28 cents a share on profit of $93 million, down from 37 cents a share and $132 million in the year-ago quarter, but in line with analyst estimates.
NetApp also reiterated its plans to cut its workforce in an attempt to combat macroeconomic conditions.
The data storage manufacturer, which has typically been one of the few bright spots in an otherwise bleak tech sector, first discussed plans to
around 480 jobs, or 6% of its total workforce, earlier this week.
"We needed to make further reductions in order to optimize our resource allocation for our strategic growth initiatives," said Warmenhoven. "Therefore, we have implemented a restructuring that unfortunately includes the elimination of approximately 6% of our global workforce."
NetApp is not the first storage company to announce
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