NetApp’s stock (NASDAQ:NTAP) tumbled Thursday morning as shareholders punish the data storage equipment maker for its tepid fiscal fourth-quarter guidance.
Sunnyvale, Calif.-based NetApp’s outlook overshadowed its stronger-than-expected results. Reporting after Wednesday's closing bell, the company said it earned 52 cents a share on a non-GAAP basis last quarter, topping consensus calls from analysts by 2 cents.
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Sales jumped 25% to $1.27 billion, narrowly trailing the Street’s view of $1.28 billion.
But shareholders focused on NetApp’s call for fiscal fourth-quarter non-GAAP EPS of 49 cents to 53 cents on $1.38 billion in sales. Even the upper end of that range would come in shy of forecasts from analysts for 54 cents a share.
Hurt by the guidance, shares of NetApp tumbled 7.93% to $58.54 in Thursday’s premarkets, putting the stock on track to erase its 2011 gain of 6%.
Analysts also responded negatively, with Citigroup downgrading the stock to “hold” from “buy” and Piper Jaffray downgrading it to “neutral” from “overweight.”
NetApp isn’t the only tech company issuing disappointing guidance as bellwether Cisco Systems (NASDAQ:CSCO) saw its stock plunge earlier this month after releasing a weaker-than-expected forecast.
“NetApp demonstrated momentum in the market again this quarter, with product revenue growth of 32% year over year, strong gross margins, and continued market share gains,” CEO Tom Georgens said in a statement.