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NetApp Earnings Preview

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Benzinga Insights
·2 min read
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NetApp (NASDAQ:NTAP) announces its next round of earnings this Wednesday, February 24. Here is Benzinga's look at NetApp's Q3 earnings report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Based on NetApp management projections, analysts predict EPS of $1.01 on revenue of $1.43 billion. NetApp earnings in the same period a year ago was $1.16 per share. Quarterly sales came in at $1.40 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

View more earnings on NTAP

The analyst consensus estimate would represent a 12.93% decline in the company's EPS figure. Sales would be have grown 1.85% from the same quarter last year. Here is how the NetApp's reported EPS has stacked up against analyst estimates in the past:

EPS Estimate

0.73

0.41

1.15

1.18

EPS Actual

1.05

0.73

1.19

1.16

Revenue Estimate

1.31 B

1.15 B

1.43 B

1.46 B

Revenue Actual

1.42 B

1.30 B

1.40 B

1.40 B

Stock Performance

Shares of NetApp were trading at $71.07 as of February 22. Over the last 52-week period, shares are up 41.17%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. NetApp is scheduled to hold the call at 17:30:00 ET and can be accessed here.

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