NetApp Shares Slide on Guidance Cut, Downgrades

Date : 08/02/2019 @ 3:47PM
Source : Dow Jones News
Stock : NetApp Inc (NTAP)
Quote : 54.11  -0.32 (-0.59%) @ 8:00PM

NetApp Shares Slide on Guidance Cut, Downgrades

NetApp (NASDAQ:NTAP)
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By Colin Kellaher

 

NetApp Inc. (NTAP) shares fell nearly 20% Friday morning after the data-management company warned that its fiscal first-quarter results would fall short of its previous estimates and cut its full-year revenue guidance.

The Sunnyvale, Calif., company said it now expects adjusted earnings of 55 cents to 60 cents a share on revenue of $1.22 billion to $1.23 billion, down from a previous forecast of adjusted earnings of 78 cents to 86 cents a share on revenue of $1.315 billion to $1.465 billion.

NetApp also said it now expects full-year revenue will fall by 5% to 10%, instead of the mid-single-digit increase it previously forecast.

The downbeat guidance prompted several Wall Street firms to cut their ratings and price targets.

Analysts at Piper Jaffray downgraded the stock to "neutral" from "overweight" and slashed their NetApp price target to $48 from $75.

Piper said a weak macro environment could persist for the next six to 12 months, making it difficult for NetApp to fix its execution issues against that backdrop. The analysts added that NetApp may also see increased pressure from Dell's planned launch of a new mid-range platform at the end of the year.

Shares of NetApp were recently down 19.6% to $46.39.

 

Write to Colin Kellaher at colin.kellaher@wsj.com

 

(END) Dow Jones Newswires

August 02, 2019 10:32 ET (14:32 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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