Tech Earnings Calls To Watch On Wednesday Afternoon: NetApp & Synopsys

Two popular mid-cap tech companies are reporting their quarterly financial results on Wednesday afternoon, after the market closes: NetApp Inc. NTAP andSynopsys, Inc. SNPS. So, let’s take a look at what the Street, the crowd and managements are expecting from the calls.

NetApp

NetApp is expected to deliver its worst quarter since -at least- 2010. Management guided for earnings of $0.23 per share on revenue of $1.325 billion. The Street and the crowd are modeling consensus earnings in line with guidance, on sales of $1.33 billion and $1.314 billion, respectively (Estimize).

These figures compare to the earnings of $0.60 per share on revenue of $1.489 billion reported in the same quarter last year, and to earnings of $0.65 per share on sales of $1.54 billion registered last quarter.

But, why are numbers so bad?

According to a report published Monday, Summit Research analyst Srini Nandury says revenue growth could be challenged, in the near term, by "the storage industry dynamics and the Cluster ONTAP product transition." The expert projects a 6 percent decline in revenue in FY16, following a tumble of about 3 percent in FY15. Revenue could grow by 1.3 percent in FY17, which is a modest figure when compared to storage growth of more than 2 percent.

Synopsys

Synopsys, on the other hand, is expected to deliver more decent results, yet down year-over-year and quarter-over-quarter. For the third quarter of 2015, management guided for earnings of $0.59 per share on revenue of $555 million. While the Street is modeling consensus earnings in line with guidance, the crowd is slightly more bullish and projects earnings of $0.61 per share on revenue of $555.98 million.

In the third quarter of 2014, earnings came in at $0.65 per share, and revenue, at $521.8 million; last quarter, EPS reached $0.68, and sales, $557.2 million.

However, one thing should be noted from the chart above: the company has a history of comfortably surpassing estimates and guidance. So, a beat this quarter should come as no big surprise.