Data management solutions provider NetApp, Inc. (NASDAQ: NTAP) reported stronger-than-expected earnings for the second quarter of 2020, while revenues declined and missed the view. The management provided guidance for the third quarter and fiscal 2020. Shares of the tech firm declined Wednesday evening, immediately after the announcement.
During the three-month period, total revenue dropped to $1.37 billion from $1.52 billion in the second quarter of 2019 and came in below the market’s forecast.
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.
Most Popular
Earnings Preview: Fastenal Company likely to report higher Q2 sales and profit
Fastenal Company (NASDAQ: FAST), a leading provider of industrial and construction supplies, is set to publish its second-quarter results next week. The company is among the hardest hit by the
What to look for when Netflix (NFLX) reports its Q2 2025 earnings results
Shares of Netflix, Inc. (NASDAQ: NFLX) stayed red on Monday. The stock has gained 50% over the past three months. The streaming giant is scheduled to report its earnings results
Coinbase shines on stablecoin boom, S&P 500 debut. Will the rally continue?
Coinbase Global, Inc. (NASDAQ: COIN) has emerged as the largest and most user-friendly cryptocurrency exchange in the US, since going public a few years ago. It has played a pivotal
