NetApp surpassed analyst estimates for fiscal Q3 earnings and generated sales according to projections today. Still, its shares slumped 9% in extended trading after cautioning that revenues in the next quarter would likely fall short of analysts’ expectations.
The firm reported $1.44 per share in Q3 earnings before other expenditures such as stock compensation, with revenue of $1.61 billion, slightly higher than the $1.47 billion reported a year earlier.
The quarter’s net income was $252 million. On the same sales outlook, Wall Street expected returns of just $1.07 per share.
A company in transition
NetApp CEO George Kurian attributed the quarter’s excellent performance to the company’s different portfolio aligning with users’ cloud and digital transformation objectives.
He said that by focusing on execution and actively managing transient supply chain headwinds, NetApp could capture increasing potential while investing in future development and providing operating leverage.
NetApp built its name as a supplier of high-end enterprise storage devices, but it has been striving to recast itself as a hybrid cloud data services and data management player in recent years. As a result, the cloud accounts for most of its revenues these days.
NetApp is performing relatively well
Amazon Web Services, Google Cloud, and Microsoft Azure are among the public cloud infrastructure providers the organization has collaborated extensively with. It also offers its NetApp Ontap data storage solution as a cloud-based managed service.
NetApp’s hybrid cloud business division generated $1.5 billion in sales in the quarter, up from $1.42 billion a year earlier. Meanwhile, sales in the public cloud sector increased to $110 million, up from $55 million the previous year.
The older NetApp business has expanded as well. Product revenue increased by 9% year over year to $846 million.