NetApp – Cloud Computing Demand Should Drive Results

Grazed from Trefis. Author: Editorial Staff.

NetApp (NASDAQ:NTAP) which experienced a slow quarter last time around is set to announce its Q2 results on November 14. Cautious IT spending and the slowdown in Europe weighed on the storage products maker in Q1 as net revenue for the first quarter was $1.44 billion, down 15% q-o-q and 1% y-o-y. Product revenue took a hit as it declined 23% sequentially and 7% annually at $898 million. Service revenue however showed robust y-o-y growth of 11% to $328 million.

For the upcoming quarter, the company has guided for revenues in the range of $1.5-$1.6 billion and EPS of $0.45-$0.5. NetApp is involved in designing solutions for storing, managing and protecting business data through enterprise storage and data management software as well as hardware products and services…

Last quarter, NetApp’s product revenues took a hit due to seasonality and macroeconomic factors, but hardware maintenance contracts showed robust growth. This means that companies are steering clear of investing in new IT infrastructure until macroeconomic conditions become favorable. We expect product revenues to catch up this quarter helped by seasonality and as companies move away from traditional computing environments to cloud computing which will drive storage demand…

Read more from the source @ http://www.trefis.com/stock/ntap/articles/153366/netapp-preview-cloud-computing-demand-should-drive-results/2012-11-12