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NetApp Profit Tops Estimates; Boosts Buyback; Initiates Dividend


Data-storage products maker NetApp Inc. (NTAP) said Tuesday after the markets closed that its fourth quarter profit fell 4% from last year, hurt mainly by higher operating expenses even as revenue grew slightly.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but its quarterly revenue fell short of analysts' forecast.

At the same time, the company forecast first quarter revenue and earnings below analysts' current consensus estimates.

The company also increased its current stock repurchase program, of which $1.4 billion remains outstanding, by an additional $1.6 billion. The company plans to complete the total $3 billion program over the next 3 years, of which $2 billion of repurchases to be completed within the next 12 months.

Additionally, NetApp said it has initiated a quarterly cash dividend of $0.15 per share, payable on July 23 to shareholders of record on July 11. The company plans to increase the dividend over time.

"The fourth quarter was highlighted by a continued strong uptake of clustered Data ONTAP, an expansion of our leadership position in Flash, and double digit growth in branded bookings," said Tom Georgens, NetApp president and CEO. "We are also pleased to announce enhancements to our capital allocation program, reflecting our confidence in our underlying business as well as our commitment to enhancing shareholder value."

The company also said it is eliminating about 900 jobs as part of a restructuring, and expects to take a $50 million to $60 million pretax charge relating to employee severance and other restructuring charges.

NetApp shares are currently gaining 3.49% in after hours trading after closing the day's regular trading session at $36.63, down 56 cents or 1.51%. The shares trade in a 52-week range of $26.26 to $39.15.

For the fourth quarter ended April 26, 2013, the Sunnyvale, California-based company reported net income of $173.8 million or $0.47 per share, compared to $180.7 million or $0.47 per share for the year-ago quarter.

Excluding items, adjusted net income for the fourth quarter was $252.5 million or $0.69 per share, compared to $252.4 million or $0.66 per share in the prior year quarter.

On average, 34 analysts polled by Thomson Reuters expected the company to earn $0.68 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Net revenue for the fourth quarter grew slightly to $1.72 billion from $1.70 billion in the same quarter last year. Thirty-one analysts had a consensus revenue estimate of $1.76 billion for the fourth quarter.

Looking forward to the first quarter, the company forecast revenue of $1.475 billion to $1.575 billion, earnings of $0.13 to $0.18 per share and adjusted earnings of $0.45 to $0.50 per share. Analysts currently expect the company to earn $0.53 per share on revenue of $1.60 billion for the first quarter.

Media reports said last week that Elliott Management Corp. took a significant stake in NetApp and is pressing for board changes its board and boosting shareholder value.

by RTTNews Staff Writer

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