NetApp shares slump as Q4 results disappoint Wall Street

Storage giant insists its strategy is on track

NetApp's third-quarter results disappointed analysts after sales came in much lower than expected, prompting a share price slump.

For the three months to 23 January, net profit at the storage firm dropped 7.9 per cent annually to $176.8m (£115.2m), on net sales which fell 3.9 per cent over the same period to $1.55bn. Financial analysts polled by Reuters expected revenue to come in at $1.69bn, prompting shares in the firm to slump five per cent last night.

Indirect revenue – which consists of channel and OEM sales – made up 81 per cent of its total sales, up one percentage point from a year ago.

Tom Georgens, NetApp's chairman and chief executive, said:

"To position NetApp for success now, and in the future, we remain focused on extending our data-fabric vision, a differentiated strategy for the hybrid cloud which allows customers to seamlessly manage their data regardless of where it is stored.

"In the third quarter we continued to deliver against this vision, enhancing our strong product portfolio with new software, services and systems to help our customers to realise the value of the hybrid cloud."

For the fourth quarter of its 2015 fiscal year, NetApp expects net revenues to be between $1.55bn and $1.65bn.