NetApp Swings to a Profit
August 17 2016 - 5:15PM
Dow Jones News
By Maria Armental
NetApp Inc. swung to a quarterly profit, boosted by cost-cutting
that helped offset a 3% revenue decline.
Shares, up 9% this year, rose 6% in after-hours trading to
$30.47.
The Silicon Valley data storage company, which has reported
lower profit for the past two years and falling sales for three
years running, is trying to revamp operations as part of the latest
restructuring that targets some $400 million in cost-savings.
In the latest period, it reported $704 million in operating
expenses, a 16% decline from the year-ago period, which included
$27 million in restructuring charges.
Over all, NetApp reported a first-quarter profit of $64 million,
or 23 cents a share, compared with a loss of $30 million, or 10
cents a share, a year earlier. Excluding stock-based compensation
and other items, profit rose to 46 cents a share from 29 cents a
share.
The most recent results are based on 7% fewer shares
outstanding.
Net revenue fell to $1.29 billion from $1.34 billion as product
revenue, which accounts for the bulk of its business, declined
0.6%.
NetApp, which cut operating expenses by 16%, had projected 34
cents to 39 cents a share in adjusted profit on $1.20 billion to
$1.35 billion in revenue.
Gross profit margin improved to 61.6% from 61.1% a year
earlier.
For the current quarter, it expects to make 51 cents to 56 cents
a share in adjusted profit on $1.27 billion to $1.42 billion in
revenue, compared with analysts' projected 54 cents a share on
$1.33 billion in revenue, according to Thomson Reuters.
NetApp ended the year with $5.3 billion in cash, the bulk of it
abroad, and $2.34 billion in debt.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
August 17, 2016 17:00 ET (21:00 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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