'I would leave that to Chuck' - NetApp CEO on why Cisco defied market uncertainty and NetApp didn't

George Kurian says he is "disappointed" with the vendor's quarterly sales

NetApp has blamed its disappointing Q3 results on an ‘uncertain macroeconomic environment'.

The storage vendor saw sales for the quarter ending 25 January climb two per cent year on year to $1.56bn.

NetApp CEO George Kurian said he was "disappointed that revenue came in at the low-end of our guidance".

Gross margin, operating margin, and earnings per share were however at the high end of expectations.

Kurian said he remains convinced that NetApp is well positioned to capitalise on the transformations that customers are going through, but said that the vendor has struggled with sales since the turn of the year.

"I'd like to address the challenges we saw in Q3 head on," he said. "The macroeconomic environment is outside of our control, but I remain exceptionally confident about our strategic position and operational focus to deliver profitable growth and shareholder value.

"After a normal close to the calendar year, we saw slowdown in purchasing across the board in January, driven by deteriorating outlooks for the global economy, as well as uncertainty around trade policy.

"In the face of these headwinds, our largest customers became more cautious in their purchasing behaviour and sought more information on the implications for their businesses of slowing economies. We did not see any real change in the competitive environment."

NetApp's results were published at the same time as Cisco's, which were more favourably received. CEO Chuck Robbins claimed that the vendor had seen very little impact from the likes of Brexit and the US-China trade war.

On an earnings call, transcribed by Seeking Alpha, an analyst put this point to Kurian directly, but the chief exec avoided drawing comparisons.

He also said that the buying slowdown was most likely not related to inflated NAND pricing.

"I can't comment on what Cisco saw or not, so I would leave that to Chuck to comment," he said.

"I think with regard to our business, what I can tell you is, we maintained discounting through the end of the quarter. So it's not a matter of hey, if you offered a lower price, customers would step forward and transact.

"I would just tell you that, if it were as easy as providing a discount to deal with forward price NAND contract, we have the vehicles to do that and we would have applied those."

NetApp's share price fell nearly nine per cent when markets opened.