NetApp Turns In Impressive Q4, Fiscal Year

By Chris Preimesberger  |  Posted 2011-05-26 Print this article Print

The Sunnyvale, Calif.-based company surpasses the $5 billion annual income mark for first time and reports fiscal Q4 revenue of $1.428 billion, up 22 percent from 2010.

Network storage provider NetApp (Nasdaq: NTAP) exemplified the ever-increasing commercial interest in cloud computing data storage May 25 by reporting better-than-expected quarterly results.

The Sunnyvale, Calif.-based company reported fiscal Q4 revenue of $1.428 billion, up 22 percent and surpassing the $1.387 billion expected, according to a group of Thomson Reuters analysts.

Net profit for the quarter ended April 29 rose to $160.6 million, or 40 cents a share, from $145.1 million, or 40 cents a share, a year earlier. Excluding items, NetApp earned 59 cents per share. Analysts had expected earnings of 53 cents per share.

Steady demand for its data storage products in the face of stiff competition from external storage market leader EMC and others sent its shares up 7 percent in after-hours trading to $55.73 by 3 p.m. EST.

"We achieved the largest market share gains in our history and closed a record number of million dollar deals," CEO Tom Georgens (pictured) said in a statement released after the Nasdaq closing bell.

In fiscal 2011, NetApp piled up revenue of $5.12 billion, a notable improvement over the company's 2010 total of $3.93 billion. Wall Street analysts had projected $5 billion.

"They've (NetApp) been taking share from the big-box hardware companies," Collins Stewart analyst Louis Miscioscia told Reuters. "The results look very good."

Georgens told Reuters that NetApp will continue to make acquisitions to keep its expansion moving.

Earlier this month, NetApp completed the purchase of microchip maker LSI Corp's Engenio external storage system business for $480 million to help it expand in the rapidly growing bandwidth-intensive video and HPC (high-performance computing) markets.

Dividends Not the Only Reward

"I don't feel compelled to give cash back in the form of dividends, and things like that, as a way to stimulate shareholder return," Georgens, a former CEO of LSI Engenio, said.

"I think a better way to provide that shareholder return is to deploy that money strategically, especially now that we're still growing."

NetApp has gained market share from other competitors, moving from No. 5 in corporate data storage equipment to No. 3 behind EMC and IBM, market researcher IDC reported in its quarterly data storage tracker.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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