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Shares of enterprise storage and data management solutions provider NetApp (NASDAQ: NTAP) soared 31.3% in August, according to data provided byS&P Global Market Intelligence. The jump was driven by a strong fiscal first-quarter report, with the company beating analyst estimates across the board.
NetApp reported first-quarter revenue of $1.29 billion, down 3% year over year but $30 million higher than the average analyst estimate. Product and software maintenance revenue declined slightly year over year, while hardware maintenance and other services revenue dropped by 7%. Despite the revenue decline, deferred revenue and financed unearned services revenue rose 8% year over year.
Non-GAAP EPS came in at $0.46, up from $0.29 during the prior-year period and $0.10 better than analysts were expecting. On a GAAP basis, NetApp reported EPS of $0.23, up from a loss of $0.10 during the same period last year. The main driver of the earnings growth was a steep drop in operating expenses. GAAP sales and marketing expense was reduced by 12.8% year over year, while research and development expense declined by 15.2%.
NetApp CEO George Kurian summed up the quarter:
NetApp expects another revenue decline during the second quarter, calling for revenue $1.265 billion to $1.415 billion. That compares to revenue of $1.45 billion during the second quarter of last year. Non-GAAP EPS is expected to be $0.51 to $0.56, down from $0.61.
While NetApp reported another revenue decline during the first quarter, better-than-expected earnings were enough to send the stock much higher in August.
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