[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / August 23, 2016 / Active Wall St. announces its post-earnings coverage on NetApp Inc. (NASDAQ: NTAP). The company reported first quarter fiscal year 2017 earnings on August 17, 2016. The Enterprise data-storage company reported a seven fold increase in earnings on the back of expense reduction measures, although, revenues declined on y-o-y basis. Register with us now for your free membership at: http://www.activewallst.com/register/.
Today, AWS is promoting its earnings coverage on NTAP. Get our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=NTAP.
Earnings Reviewed
For the three months ended on July 29, 2016, NetApp posted GAAP earnings of $64 million, or $0.23 per share, compared to GAAP loss of $30 million, or $0.10 per share, in the prior-year's quarter, reversing earnings decline of the past five consecutive quarters. On non- GAAP basis, NetApp reported earnings of $0.46 per share, beating analysts' consensus estimate of $0.36 per share. It was the best gain since fiscal Q1 2011. NetApp reported revenue of $1.29 billion, down 3% on y-o-y basis, but slightly above Wall Street's estimates of $1.26 billion, as well as the mid-point of its own guidance range of $1.20 billion to $1.35 billion.
"We are pleased with our first quarter results. Our focus on disciplined execution of our strategy is yielding results and starting to change the trajectory of our business," said George Kurian, chief executive officer, "We remain sharply focused on operating more efficiently while delivering market-leading innovations that are aligned to our customers' business and IT transformation priorities."
Segment Overview
For Q1 FY17, the Sunnyvale, California-based company reported that revenue from its Product segment, representing 51% of total revenue, declined slightly to $660 million from $664 million in Q1 FY16.
Software maintenance revenues slipped to $241 million from $248 million in the comparable year earlier quarter.
Revenues from NetApp's Hardware Maintenance & Other Services division dropped 7.1% to $393 million, with hardware maintenance support contract revenues dropping 6.6% to $323 million, while Professional & Other Services' revenues slumped 9.1% to $70 million.
During Q1 FY17, NetApp reported that adjusted operating expenses declined 14.2% to $699 million. As a percentage of revenues, the figure contracted 700 bps to 54% mainly due to the company's on-going cost reduction measures, including a 13% decrease in sales and marketing expenses.
Dividend
During Q1 FY17, NetApp generated $228 million in cash from operations and returned $228 million to shareholders through share repurchases and a cash dividend. The company also announced dividend of $0.19 per share, payable October 26, 2016, to shareholders of record as of the close of business on October 7, 2016.
Outlook
For Q2 FY17, NetApp is projecting for revenue in the range of $1.265 billion to $1.415 billion, slightly above the consensus of $1.35 billion at the midpoint. It expects earnings minus items in the range of 51 cents to 56 cents. The consensus is 54 cents. NetApp also reduced research and development expenses by 15%, a sign that the company may not be making the investments needed to bring revenue growth back.
Stock Performance
At the close of trading session on August 22, 2016, NetApp's stock closed at $34.71, flat for the day, with a total volume of 5.05 million shares traded. The company's stock price has surged 31.13% in the past one month and 33.66% on YTD basis.
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