NetApp (Nasdaq: NTAP) announced its results for the most recent quarter on May 23, 2012. NetApp supplies enterprise storage and data management software and hardware products and services.
Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa.SEE: Everything Investors Need To Know About Earnings
The Numbers:
NetApp managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported adjusted net income of 66 cents per share versus the 49 cents per share estimate and revenues of $1.7 billion versus the $1.68 billion estimate. Revenue climbed 19.2% from the same period last year. NetApp reported net income of $180.7 million during the fourth quarter. This is 12.5% higher than the year-ago quarter.
Management Quote:
"With a strong product offering and well established partner ecosystem, NetApp delivered our ninth consecutive quarter of over 20% year-over-year product revenue growth. Our ability to generate cash remains robust as the fourth quarter was our best ever quarter in terms of cash flow from operations," said Tom Georgens, president and CEO. "As the innovation leader in the industry, and the only company offering a unified scale out platform, we are the clear choice for enterprises as they re-architect their data centers to provide agility while reducing complexity and cost."
Looking Ahead:
When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. The average estimate hasn't changed from $1.81 per share for the fiscal year.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
