[ACCESSWIRE]
Upcoming AWS Coverage on Brocade Communications Systems, Post-Earnings Results
LONDON, UK / ACCESSWIRE / November 28, 2016 / Active Wall St. announces its post-earnings coverage on NetApp, Inc. (NASDAQ: NTAP). The company posted its financial results for the second quarter fiscal 2017 (Q2 FY17) on November 16, 2016. The storage equipment vendor's revenue missed analysts' expectations slightly; however numbers topped bottom-line. The Company forecasts Q3 FY17 to be above expectation. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of NetApp's competitors within the Data Storage Devices space, Brocade Communications Systems, Inc. (NASDAQ: BRCD), reported on November 21, 2016, financial results for its fourth quarter and full fiscal year 2016 ended October 29, 2016. AWS will be initiating a research report on Brocade in the coming days.
Today, AWS is promoting its earnings coverage on NTAP; touching on BRCD. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=NTAP
http://www.activewallst.com/registration-3/?symbol=BRCD
Earnings Reviewed:
During the quarter ended on October 28th, 2016, NetApp reported net revenues of $1.34 billion; an increase of approximately 3.5% sequentially and a decline of about 7% on a y-o-y basis. NetApp's product revenue of $710 million increased 7.5% sequentially and declined 13% compared to Q2 FY16. The company's sales numbers were slightly below market expectations of $1.35 billion.
The company's GAAP net income for Q2 FY17 totaled $109 million, or $0.38 per share, compared to GAAP net income of $114 million, or $0.39 per share, for the comparable period of the prior year. Adjusted for one-time items, NetApp earned $169 million, or $0.60 per share, compared to a non-GAAP net income of $181 million, or $0.61 per share in Q2 FY16. The earnings results surpassed analysts' expectations of adjusted earnings of $0.54 per share.
Margin Matters:
For Q2 FY17, NetApp reported gross margin of 62.7% which was within the company's guidance range. Product's gross margin of 48.2% decreased about 3.5 points from Q2 FY16 and increased 1.5 points sequentially. Software maintenance gross margin was relatively flat sequentially and year-over-year, while hardware maintenance and other services gross margin increased just over 3 points year-over-year.
Cost Savings:
In Q3 FY16, NetApp announced plans to reduce its cost structure by $400 million gross annualized by the end of FY17. The company stated that some of those savings will be reinvested into strategic opportunities such as SolidFire and will yield a net run rate savings annually of roughly $130 million by the end of FY17. On November 3, 2016, the company initiated a reduction of approximately 6% of its worldwide headcount which will result in a one-time charge of between $50 million to $60 million, primarily in Q3 FY17. NetApp stated that this action will yield an annual run rate savings of approximately $130 million.
Balance Sheet:
As of October 29th, 2016, NetApp had $4.4 billion in total cash, cash equivalents, and investments. During Q2 FY17, the Company generated $158 million in cash from operations and returned $169 million to shareholders through share repurchases and a cash dividend. NetApp also announced the next cash dividend of $0.19 per share. The quarterly dividend will be paid on January 25, 2017, to shareholders of record as of the close of business on January 6, 2017.
Guidance:
For Q3 FY17, NetApp is forecasting net revenues to range of $1.325 billion to $1.475 billion, which at the midpoint, implies a sequential increase of approximately 4% and a 1% increase year-over-year. The company is expecting Q3 gross margin in the range of 61.5% to 62.5% and operating margin between 18% and 18.5%. Finally, NetApp is projecting earnings per share for Q3 FY17 to range from approximately $0.72 to $0.77 per share. Analysts expected revenue of $1.37 billion.
Stock Performance:
NetApp's share price finished yesterday's trading session at $36.61, rising slightly by 0.72%. A total volume of 1.53 million shares exchanged hands. The stock has rallied 46.53% and 22.26% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the company have surged 41.75%. The stock is trading at a PE ratio of 33.28 and has a dividend yield of 2.08%.
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SOURCE: Active Wall Street
