Friday, June 1, 2012

NetApp Sees Supply Constraints on New Storage Products

NetApp (NTAP) reported strong third quarter earnings, but sales and the outlook for the fourth quarter was a smidge light relative to expectations.

The storage company delivered third quarter earnings of $172 million, or 42 cents a share, on revenue of $1.27 billion, up 25 percent from a year ago. Non-GAAP earnings were 52 cents a share. Wall Street was expecting NetApp to report earnings of 50 cents a share on sales of $1.28 billion.

As for the outlook, NetApp projected fourth quarter revenue to be about $1.38 billion give or take 2 percent. Earnings will be about 38 cents a share to 42 cents a share with non-GAAP net income of 49 cents a share to 53 cents a share. Wall Street was expecting earnings of 54 cents a share on revenue of $1.38 billion.

Overall, NetApp is performing well. The company’s recent product launch—the FAS3200 systems—has seen demand exceed supply, said Tom Georgens, CEO of NetApp. Those shortages may explain why NetApp’s outlook is a bit below expectations. Georgens said that NetApp is “committed to catching up to the demand as quickly as possible.”

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