NetApp shares shocked by profit warning
Stock drops nearly 20 per cent
Magic Quadrant for Enterprise Backup/Recovery
In brief NetApp stock plunged nearly 20 per cent in after hours trading when the storage supplier warned first quarter revenue may be down further than previously expected.
The company's preliminary results today are below the previously gloomy forecast released in May. When NetApp reports its earnings on August 15, revenue is now expected to be in the range of $684m to $688m. The figure is short of the $745m to $753m it had forecast during its Q4 07 report.
"We are disappointed with our Q1 results," NetApp CEO, Dan Warmenhoven said in a statement. "We believe our performance was impacted by some continued softness in enterprise storage spending, most notably in our existing customer accounts in the U.S. and parts of Europe."
The lowered expectations would put revenue growth between 10 to 11 per cent year-over-year in the first quarter. The company vowed to slow spending and hiring to compensate for the slump. ®
COMMENTS
Changed Paradigm
"and NetApp is going to have to start competing on price."
seth,
It is Content which rules the Game and that is the Competition Space which will pay Quality and Continuity of Supply, ITs Premium dDividend.
stop innovating, see what happens!
Seth is spot on: NetApp has had a huge pile of innovative products, but as EMC, IBM, and HP start to emulate much of their functionality this innovation advantage is decreasing.
NetApp needs to get back onto the innovation curve or else start cutting prices!
Re: They finally are feeling the competition
How true!
Small companies can get a linksys box for a few hundred quids and 4TB of raw space. True, it's not NetApps, but 2 of those in mirror still cost significantly less then a FAS.
And let's not forget that with linux you can still build a decent box (and you can keep it well mirrored on the network) with a lot of terabytes to spare if you were to use a tower form.
BTW, after about 10/12 U of rented space and relative energy, you are better off getting a full rack, so space is not a premium comodity anymore nowadays in a data centre. Even less in an office environment where you can rack things up without the use of expensive rack kits.
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