NetApp Posts Loss Amid Restructuring
August 19 2015 - 5:20PM
Dow Jones News
NetApp Inc. swung to a loss in the first quarter amid a
restructuring that the data-storage company said would eliminate
500 jobs.
The Silicon Valley company said it expected to complete the
overhaul by the third quarter and estimated the cost at $25 million
to $35 million. It recorded a charge of $27 million in the first
quarter.
"The IT industry as a whole is going through fundamental change
as enterprises transform themselves with digital capabilities. Data
is at the heart of these transformations," Chief Executive George
Kurian said, adding: "Our first fiscal quarter marks the beginning
of a new chapter for NetApp."
Shares, which set a 52-week-low during regular trading
Wednesday, surged 12% to $33.37 in late trading.
For the current quarter, NetApp projects 55 cents to 60 cents a
share in profit on $1.4 billion to $1.5 billion in revenue,
compared with the consensus of 46 cents a share on $1.39 billion in
revenue, according to analysts surveyed by Thomson Reuters.
Overall, for the quarter ended July 31, NetApp reported a loss
of $30 million, or 10 cents a share, compared with a year-earlier
profit of $88 million, or 27 cents a share. The most recent quarter
had 7.6% fewer shares outstanding than the year-earlier period.
Excluding stock-based compensation and other items, earnings
fell to 29 cents a share from 60 cents a share a year earlier.
Net revenue fell 10% to $1.34 billion.
NetApp had projected profit of 20 cents to 25 cents a share on
$1.28 billion to $1.38 billion in revenue.
Gross margin narrowed to 61.1% from 63% a year earlier.
The Sunnyvale, Calif., company ended the quarter with $5 billion
in cash.
Through Wednesday's close, the company's stock was down 28% for
the year.
Write to Maria Armental at maria.armental@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 19, 2015 17:05 ET (21:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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