NetApp’s (NTAP) fourth quarter revenue and earnings topped Street estimates. Net revenue of $1.64 billion, surged 11% over the prior year period, and adjusted earnings climbed 22% to $1.05 per share. Shares of the data storage provider dipped more than 4% during extended hours of trading.
NetApp’s focus on product transition seems to be bearing fruit. The increase in fourth quarter net sales was driven by strong product revenues. Contributing a lion’s share to the company’s top-line product revenues rose 18.6% to $1.01 billion.
As the company is entering into high-growth markets, sales from strategic solutions of $745 million witnessed a 25% growth from prior year period. It’s worth noting that strategic domain is a major contributor to the product revenues.
To tackle the competition, NetApp is undergoing a transition with its foray into flash storage and cloud market. As a result, all-flash array business sales jumped 43% compared to last year with yearly revenue run rate touching $2.4 billion.
NetApp expects the first quarter revenues to be between $1.365 billion and $1.465 billion and earnings, on an adjusted basis, in the range of $0.76 to $0.82 per share. The company has doubled its dividend payout for the quarter to $0.40 per share.
For fiscal 2019, the company forecasts its gross margins, on an adjusted basis, to be nearly 63%, down 400 basis points compared to 63.4% in 2018. So far in 2018, the share price has increased more than 21% and for the last 12 months, it has skyrocketed nearly 70%.