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VMware, Inc. Message Board

  • ezk00 ezk00 Feb 13, 2013 10:49 AM Flag

    NTAP F3Q13 Preview: Signs of Improvement

    F3Q13 Preview: Signs of Improvement
    ■ Results on February 13; maintain Neutral. For F3Q13, we forecast NetApp
    revenue/EPS of $1.65bn (+5.3% y/y, +7.0% q/q)/$0.58, in line with consensus
    and guidance of $1.58-$1.68bn/$0.53-$0.58. Recent data points suggest a
    tempered improvement in the storage market and NTAP's position. Long term
    we fear that competitors are shrinking NetApp’s technology lead, which will
    moderate the company’s share gains and top line growth. We reiterate our
    Neutral rating and $33 target price.
    ■ Key focus areas. Key areas of focus include: i) management outlook on storage
    spending as we progress through 2013; ii) customer acceptance of ONTAP
    8.1.1; iii) the outlook for gross margins due to abating HDD price pressure and
    pricing pass-alongs; iv) SSD product portfolio and traction.
    ■ Data points are more upbeat for NetApp. While still present Department of
    Defense (DoD) exposure raises concerns, cyclical and fundamental factors point
    toward an improving outlook for the company. Our detailed storage survey,
    published January 7, 2013 in our “IT Hardware: 2013 Outlook”, points to
    persistent NetApp share gains over time. NetApp continues to benefit from
    virtualization adoption and positive sentiment around its ONTAP 8.1.1 software.
    This comes amid potential improvement in storage spend, with survey
    respondents pointing to a back half acceleration and EMC’s mid-tier growing 5%
    y/y versus flat growth in the quarter prior. While all these factors are a positive,
    we fear increasingly more able competitors will moderate NetApp growth.

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