NetApp's Q3 Earnings Miss: Shares Plummet 15% in After-Hours Trading

NetApp Inc. (NTAP) reported fiscal third-quarter earnings that missed analysts' expectations, sending its shares tumbling by 15% in after-hours trading. The data storage company posted net income of $252 million, or $1.10 per share, compared to the consensus estimate of $1.28 per share. Adjusted earnings were $1.44 per share, still below the expected $1.48 per share.

NetApp's revenue of $1.61 billion matched Street forecasts, but the company's guidance for the current quarter fell short of expectations. NetApp expects its per-share earnings to range from $1.21 to $1.31, compared to the analyst consensus of $1.35. The company also projected revenue in the range of $1.64 billion to $1.74 billion, below the expected $1.67 billion.

NetApp's CEO, George Kurian, acknowledged the company's execution issues, stating, "Top-line performance was below our standards." He pledged corrective actions to improve execution and drive better results.



Analysts remain optimistic about NetApp's long-term prospects, with a "Moderate Buy" rating overall. The average price target for NTAP is $140.20, indicating a potential upside of 16.9% from current prices.

NetApp's Q3 earnings miss highlights the challenges faced by the company in maintaining its strong margin profile and accelerating revenue growth in the face of increasing competition in the data infrastructure market. To address these challenges, NetApp should focus on refining its go-to-market strategy, strengthening partnerships and integrations, investing in product innovation, and addressing execution issues. By taking these steps, NetApp can improve its cash flow management, maintain its strong margin profile, and effectively compete in the data infrastructure market.