NetApp shares tumble in New York despite earnings beat

NetApp Inc (NASDAQ:NTAP) shares tumbled over 6% to $39.68 in New York after the data storage specialist posting an earnings beat but analysts were not so upbeat on the story.

First quarter net income was $136 million, or 49 cents a share, on revenue of $1.33bn – up 2% from the year-earlier quarter. 

This  was better than consensus analyst had expected – at earnings of 37 cents a share, and sales of $1.32bn.

“The company has clearly turned the corner, but we see increased competition in the next year from a currently underperforming Dell EMC and a preoccupied Hewlett Packard Enterprise,” said Swiss broker UBS.

BMO analyst Tim Long said the tech firm was “executing” better, especially on margins, and the transition to flash was working.

But he reportedly highlighted that the competitive environment remained challenging, and revenues are benefiting from higher pricing related to memory supply constraints that are likely not sustainable in the long run.

RBC noted the decline in software and services, but noted the firm is confident that this was a temporary trend.

Story by ProactiveInvestors