NetApp Rises as Profit Beats Estimates, Expands Buyback
NetApp Inc. (NTAP) surged the most in more than two years after second-quarter profit beat estimates and the maker of data-storage products expanded its share repurchase program by $1.5 billion.
Earnings excluding some items for the fiscal second quarter, which ended Oct. 26, were 51 cents a share, the company said in a statement. That topped analysts’ average projection of 48 cents, according to data compiled by Bloomberg. NetApp forecast third-quarter profit of 53 cents to 58 cents a share, compared with a 54-cent average estimate.
“Management clearly executed well through a challenging macro environment in which we expected to see more of an adverse impact on results than was the case,” Maynard Um, an analyst at Wells Fargo Securites, wrote in a research report. “The quarter should, for the time being, alleviate concerns that competition is having a meaningful impact on NetApp as product gross margin improved.”
NetApp also said it agreed to buy CacheIQ Inc., a closely held storage solutions company based in Austin, Texas. Terms weren’t disclosed.
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