NetApp Shares Slide on Guidance Cut, Downgrades
August 02 2019 - 10:47AM
Dow Jones News
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)
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