NetApp Expected To Deliver YoY Decline In EPS, Revenue

Shares of NetApp Inc. NTAP rose slightly on Wednesday ahead of the company’s fourth quarter financial results after the market closes.

For the quarter, the company guided a 15 percent year-over-year decline in earnings, to $0.73 per share (on revenue of $1.6 billion), from $0.84 per share (on revenue of $1.649 billion) reported in the fourth quarter of last year. This guidance also implies a small decline from last quarter’s earnings of $0.75 per share on revenue of $1.551.

According to Estimize, the Street anticipates earnings in line with guidance of $0.73 per share, on marginally lower revenue of $1.593 billion. The crowd is more bullish and projects earnings of $0.76 per share on revenue of $1.612 billion.

Related Link: Analyst: NetApp Should Acquire Someone Or Get Acquired

NetApp has managed to beat the Street's expectations in most of the quarters over the past couple of years.

A second chart illustrates the evolution of sentiment over time. Both the crowd’s and experts’ consensus estimates have been consistently falling since the beginning of the year. Both estimates now stand at their lowest points.

A Lukewarm Demand Environment

In a recent report, analysts at Citi previewed NetApp’s earnings, and reiterated a Neutral rating and $39 price target. According to a recent article, “While FX headwinds pressured the revenue for 4FQ, the underlying storage demand appeared to have weakened.” The analysts are modeling top line and EPS either in-line or slightly below consensus."

"We believe there is risk of a modest guide-down (for the July quarter) given that revs have declined by an average of 11% q/q during the past two years, and mgt may error on the side of cautious given a lukewarm demand environment," they add.