How NetApp’s Fiscal 4Q17 Results Impacted Its Fiscal 1Q18 Outlook
Tepid guidance sparks selloff
NetApp is expecting its fiscal 1Q18 revenues to range from $1.2 billion–$1.4 billion. However, the consensus estimate called for revenues of $1.3 billion. Coming to the bottom line, NetApp’s management expects adjusted EPS (earnings per share) between $0.49–$0.57. The company’s earnings guidance falls below the consensus EPS estimate of $0.66.
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NetApp’s adjusted EPS
In its just-reported fiscal 4Q172 results, NetApp posted adjusted EPS of $0.86, up from $0.55 in fiscal 4Q16 and above the consensus estimate of $0.82.
Its revenues of ~$1.5 billion rose from ~$1.4 billion a year earlier and topped the consensus estimate of ~$1.4 billion. The chart above shows NetApp’s top-line trend for the last five quarters.
Looking back over the trailing 12 months, NetApp has topped EPS expectations in the last four quarters, while its revenues have surpassed expectations in three of the last four quarters.
Favorable market conditions
For storage companies like NetApp, Pure Storage (PSTG), Western Digital (WDC), IBM (IBM), and Seagate Technology (STX), technology trends such as the Internet of Things and cloud computing seem to improve the sector’s market conditions.