NetApp Misses Q4 Estimates, Will Cut 500 Jobs

Data storage equipment maker NetApp reported fourth-quarter results below analysts’ estimates, hurt by lower sales to original equipment manufacturers, sending its shares down more than 8 percent in extended trading.

The company, which cut about 500 jobs as part of a restructuring, also forecast first-quarter profit below market estimates.

NetApp has been trying to boost growth by focusing on cloud-based products as businesses cut spending on high-end storage systems.

It also faces competition from larger rival EMC and newer and cheaper flash-based storage technology vendors such as Nimble Storage and Pure Storage.

Net income fell to $134.9 million, or 43 cents per share, for the quarter ended April 24, compared with $197 million, or 59 cents per share, in the year-earlier quarter.

Revenue fell about 7 percent to $1.54 billion.

Excluding items, the company earned 65 cents per share. Analysts were expecting adjusted earnings of 72 cents per share on revenue of $1.59 billion, according to Thomson Reuters I/B/E/S.

For the first quarter, NetApp forecast a profit of 20 cents to 25 cents per share on revenue of $1.28 billion to $1.38 billion.

Analyst on average were expecting a profit of 59 cents on $1.46 billion in revenue.

NetApp expects to incur charges of about $25 million to $35 million related to the job cuts, the company said in a regulatory filing.

Most of the charges will be recognized in the company’s first quarter.

NetApp’s shares closed at $35.33 on the Nasdaq on Wednesday.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Anil D’Silva)

This article originally appeared on Recode.net.