Bloomberg News

NetApp Rises as Profit Beats Estimates, Expands Buyback

November 15, 2012

NetApp Inc. (NTAP:US) surged the most in more than two years after second-quarter profit beat estimates and the maker of data-storage products expanded its share repurchase program by $1.5 billion.

The shares (NTAP:US) of Sunnyvale, California-based NetApp advanced 11 percent to $30.20 at the close in New York, the biggest gain since May 2010. The stock (NTAP:US) pared its loss for the year to 17 percent.

Earnings excluding some items for the fiscal second quarter, which ended Oct. 26, were 51 cents a share, the company said in a statement. That topped analysts’ average projection of 48 cents, according to data compiled by Bloomberg. NetApp forecast third-quarter profit of 53 cents to 58 cents a share, compared with a 54-cent average estimate.

“Management clearly executed well through a challenging macro environment in which we expected to see more of an adverse impact on results than was the case,” Maynard Um, an analyst at Wells Fargo Securites, wrote in a research report. “The quarter should, for the time being, alleviate concerns that competition is having a meaningful impact on NetApp as product gross margin improved.”

NetApp also said it agreed to buy CacheIQ Inc., a closely held storage solutions company based in Austin, Texas. Terms weren’t disclosed.

To contact the reporter on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • NTAP
    (NetApp Inc)
    • $41.37 USD
    • -1.59
    • -3.84%
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