NTAP NetApp Inc

By Maria Armental 

NetApp Inc. said Wednesday it plans to lay off 12% of its workers as part of a broader roughly $400 million cost-cutting move that the data-storage company expects to pay off by the end of fiscal 2017.

The move comes as the Silicon Valley data-storage continues to move its customers to its newest cloud-based storage system, clustered Data ONTAP, or cDOT.

Chief Executive George Kurian said in a conference call with analysts that the company doesn't intend to change its quarterly dividend.

Mr. Kurian, who previously oversaw strategy and development of the company's product and solutions portfolio, became the chief executive in June.

NetApp estimates it will book about $60 million to $70 million in costs tied to the layoffs in the fourth quarter. Shares, down 38% over the past 12 months, were largely unchanged in after-hours trading.

Over all, for its current fourth quarter, NetApp projects 55 cents to 60 cents in adjusted profit on $1.35 billion to $1.50 billion in revenue. Analysts surveyed by Thomson Reuters projected 51 cents a share on $1.35 billion in revenue.

In May, NetApp announced plans to lay off about 4% of the company's workers as part of a broader restructuring.

For the third quarter ended Jan. 29, NetApp reported a profit of $153 million, or 52 cents a share, down from $177 million, or 56 cents a share, a year earlier. The most recent quarter had 6.6% fewer shares outstanding than the year-earlier period, which influences the per-share profit.

Excluding stock-based compensation and other items, the profit fell to 70 cents a share from 75 cents a share a year earlier.

Net revenue fell to $1.39 billion from $1.55 billion a year earlier as product revenue declined 19%.

NetApp had projected an adjusted per-share profit of 66 cents to 71 cents on revenue of $1.4 billion to $1.5 billion.

Gross margin narrowed to 61.7% from 63% a year earlier.

The Sunnyvale, Calif., company ended the quarter with $5 billion in cash.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

February 17, 2016 17:57 ET (22:57 GMT)

NetApp (NASDAQ:NTAP)
Historical Stock Chart
From Mar 2024 to Apr 2024

NetApp (NASDAQ:NTAP)
Historical Stock Chart
From Apr 2023 to Apr 2024