Also read: Microchip Technology Q2 earnings meet
Product revenues dropped 16% year-over-year, hurt by weakness in both the Strategic and Mature sub-divisions. Region-wise, the Americas accounted for about 56% of total revenue and EMEA 29%. Around 14% of the revenues came from Asia-Pacific.
Earnings up 3%
At $1.09 per share, adjusted earnings were up 3% from last year and above the consensus estimates. On a reported basis, the company reported net profit of $243 million or $1.03 per share, compared to $241 million or $0.91 per share last year.
“We continue to be disciplined in our spending and have a strong financial model with growing gross margins and operating margins that enable us to return cash to shareholders and invest in the long-term health of our business, “ said George Kurian, chief executive officer of NetApp.
Outlook
For the third quarter, the management expects revenues to be between $1.390 billion and $1.540 billion. Unadjusted earnings per share are expected to be in the $0.96-1.04 range and adjusted earnings in the range of $1.14 per share to 1.22 per share.
In the whole of 2020, net revenue is expected to decline by around 8% year-over-year. Consolidated gross margin is expected to be 66-67% and operating margin between 18% and 19%.
Capital Return
During the quarter, NetApp returned $611 million to shareholders through share repurchases and dividends. The company also declared a cash dividend of $0.48 per share, to be paid on January 22, 2020, to shareholders of record on January 3, 2020.
After slipping to a two-year low in August, NetApp shares are currently back on the growth path. The stock lost 16% since last year. It closed Wednesday’s regular session lower and dropped further during the extended session.