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Network Appliance Guides Lower

Sales of a new line of products is sluggish.

Shares of

Network Appliance

(NTAP) - Get NetApp, Inc. Report

were off sharply in postclose trading as investors reacted to the news that the company won't meet first fiscal quarter earnings or revenue projections.

Revenue in the July quarter of fiscal 2006 will range from $446 million to $449 million, compared with the company's earlier forecast of $465 million to $479 million. Despite the shortfall, revenue will likely come in about 24% above the same quarter in fiscal 2005.

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Earnings are expected to range from 15 cents to 16 cents a share on a GAAP and non-GAAP basis. Earlier, the storage networking gear maker projected a GAAP EPS of 16 cents to 17 cents, and a non-GAAP profit of 17 cents or 18 cents a share.

Analysts polled by Thomson First Call were looking for a non-GAAP profit of 18 cents a share on sales of $474.14 million.

CEO Dan Warmenhoven said the shortfall was related to slower-than-expected initial sales of the company's new line of midrange products.

In recent after-hours trading, shares were off $1.25, or 4.9%, to $24.25 on Instinet.

Interestingly, the stock was up about 4% most of the regular trading day on heavy volume before dropping sharply about an hour before the close.

Net App will release final results for the first quarter after the close of trading on Aug. 17.