By Maria Armental
NetApp Inc. is laying off about 500 workers as part of a
restructuring following disappointing results for the April quarter
and weak projections for the current quarter.
The Silicon Valley company said it plans to eliminate the
positions by the third quarter and expects to record a charge of
$25 million to $35 million related to the cuts. Most of those
charges are expected to be recognized in the first quarter, the
company said in a securities filing.
Shares, up 4% over the past 12 months, fell nearly 9% to $32.25
in late trading, below a 52-week-low set Tuesday during regular
trading.
For the first quarter, NetApp projects profit of 20 cents to 25
cents a share on $1.28 billion to $1.38 billion in revenue,
compared with the consensus of 59 cents on $1.46 billion in
revenue, according to Thomson Reuters. The lower projections
account for the impact of the restructuring.
The Sunnyvale, Calif., company, meanwhile, said it was boosting
its quarterly dividend by 9% to 18 cents a share.
Overall, for the quarter ended April 24, NetApp reported a
profit of $134.9 million, or 43 cents a share, compared with $197
million, or 59 cents a share, a year earlier. The latest quarter
had fewer shares outstanding.
Excluding stock-based compensation and other items, earnings
fell to 65 cents a share from 84 cents a share a year earlier.
Net revenue fell nearly 7% to $1.54 billion.
NetApp had projected earnings of 70 cents and 75 cents on
revenue of $1.55 billion to $1.65 billion.
Gross margin narrowed to 60.7% from 63.2% a year earlier.
The Silicon Valley company didn't specify in the news release
what actions it was taking.
Shares, up 4% over the past 12 months, fell nearly 8% to $32.65
in late trading, below a 52-week-low set Tuesday during regular
trading.
The Sunnyvale, Calif., company, meanwhile, said it was boosting
its quarterly dividend by 9% to 18 cents a share.
For the first quarter, NetApp projects profit of 20 cents to 25
cents a share on $1.28 billion to $1.38 billion in revenue,
compared with the consensus of 59 cents on $1.46 billion in
revenue, according to Thomson Reuters.
Overall, for the quarter ended April 24, NetApp reported a
profit of $134.9 million, or 43 cents a share, compared with $197
million, or 59 cents a share, a year earlier. The latest quarter
had fewer shares outstanding.
Excluding stock-based compensation and other items, earnings
fell to 65 cents a share from 84 cents a share a year earlier.
Net revenue fell nearly 7% to $1.54 billion.
NetApp had projected earnings of 70 cents and 75 cents on
revenue of $1.55 billion to $1.65 billion.
Gross margin narrowed to 60.7% from 63.2% a year earlier.
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