Earnings Preview: NetApp (NTAP) Q4 Takes Center Stage
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Price: $207.08 --0%
Rating Summary:
23 Buy, 31 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 10 | Down: 16 | New: 19
Rating Summary:
23 Buy, 31 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 10 | Down: 16 | New: 19
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Shares of NetApp (Nasdaq: NTAP) declined on Tuesday ahead of its Q4 earnings report. Investors expect NetApp to report EPS of $0.68 on $1.76 billion in revenue. Sentiment remains cautious given the current environment and investors anticipating subdued guidance. For Q1, the Street is looking for EPS of $0.53 on revenue of $1.6 billion.
Commenting, analyst Rohit Chopra of Wedbush said, "We think there has been little material change in the demand environment for storage, with ongoing competition and weakness in federal causing greater scrutiny over budgets, and increased sign-offs to get deals closed. Our view was reinforced by a slight miss from competitor EMC, however the company reaffirmed full year-guidance which should assuage fears of further deterioration in the IT spending environment. Furthermore, EMC’s results echo the sentiment of several companies that have already reported results who expect acceleration in 2H13 . . . Our expectations are for an in-line quarter with Q4 revenue meeting our $1,758mn estimate and EPS meeting our $0.67 estimate. . . expect continuation of cautious guidance, possibly a discussion how to improve shareholder value."
Wells Fargo analyst Maynard Um said, "We expect NTAP to report FQ4 revenue largely in line with our/Street estimates of $1.76B (guidance: $1.7-1.8b in revenue) but believe there could be some upside potential to our/Street EPS of $0.68 (guidance: $0.65-0.70) potentially driven by better operating expense controls (last quarter’s upside was largely driven by lower operating expense with a portion related to lower commissions expense due to lower sales against its goals). We expect FAS3000 (introduced in November 2012) and FAS6200 (introduced in March) to potentially help blended average selling price this quarter. We expect product gross margin to be up slightly sequentially, in line with guidance of flat to slightly up. We expect guidance to be below our estimates of $1.66B/$0.59 though note Street estimates ($1.60B/$0.53) already reflect this."
NetApp executive management will host a conference call with the financial analyst community at 2:00 p.m. Pacific Time to provide their perspective on market dynamics and the company's performance. The call will be broadcast live via the Internet. The live Webcast call can be accessed at investors.netapp.com
Commenting, analyst Rohit Chopra of Wedbush said, "We think there has been little material change in the demand environment for storage, with ongoing competition and weakness in federal causing greater scrutiny over budgets, and increased sign-offs to get deals closed. Our view was reinforced by a slight miss from competitor EMC, however the company reaffirmed full year-guidance which should assuage fears of further deterioration in the IT spending environment. Furthermore, EMC’s results echo the sentiment of several companies that have already reported results who expect acceleration in 2H13 . . . Our expectations are for an in-line quarter with Q4 revenue meeting our $1,758mn estimate and EPS meeting our $0.67 estimate. . . expect continuation of cautious guidance, possibly a discussion how to improve shareholder value."
Wells Fargo analyst Maynard Um said, "We expect NTAP to report FQ4 revenue largely in line with our/Street estimates of $1.76B (guidance: $1.7-1.8b in revenue) but believe there could be some upside potential to our/Street EPS of $0.68 (guidance: $0.65-0.70) potentially driven by better operating expense controls (last quarter’s upside was largely driven by lower operating expense with a portion related to lower commissions expense due to lower sales against its goals). We expect FAS3000 (introduced in November 2012) and FAS6200 (introduced in March) to potentially help blended average selling price this quarter. We expect product gross margin to be up slightly sequentially, in line with guidance of flat to slightly up. We expect guidance to be below our estimates of $1.66B/$0.59 though note Street estimates ($1.60B/$0.53) already reflect this."
NetApp executive management will host a conference call with the financial analyst community at 2:00 p.m. Pacific Time to provide their perspective on market dynamics and the company's performance. The call will be broadcast live via the Internet. The live Webcast call can be accessed at investors.netapp.com
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