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NetApp Q1 Results Beat Street, Shares Up 5%

Shares of NetApp Inc. (NTAP) rose 5% on extended trading Wednesday after the company's first-quarter profit and revenues trumped Wall Street estimates.

Sunnyvale, California-based NetApp reported first-quarter net income of $103 million or $0.42 per share, down from $283 million or $1.05 per share last year.

On an adjusted basis, NetApp's earnings were $0.65 per share for the three-month period, down from $1.04 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.58 per share. Analysts' estimates typically exclude special items.

NetApp's revenues for the quarter to $1.24 billion from $1.47 billion last year. Analysts had a consensus revenue estimate of $1.23 billion.

"I am clearly disappointed with our Q1 top line results but remain confident in our strategy and the fundamentals of our business model. The gross margin and cost structure improvements we've made provide support for our free cash flow generation and enable us to navigate the ongoing macroeconomic headwinds while making the strategic moves that position us well to return to growth," said CEO George Kurian.

Looking forward to the second quarter, NetApp expects adjusted earnings of $0.91 to $0.99 per share and revenues of $1.325 billion to $1.475 billion. Analysts currently estimate earnings of $0.87 per share and revenues of $1.35 billion.

For the full year 2020, NetApp expects revenues to decline 5% to 10%. Analysts currently estimate revenues to decline 8.50%.

NTAP closed Wednesday's trading at $44.71, down $2.28 or 4.85%, on the Nasdaq. The stock however, gained $2.43 or 5.44% in the after-hours trade.

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