NetApp CEO Replacement Trumps Earnings (NTAP)

NetApp, Inc. (NASDAQ: NTAP) just gave its earnings for its first quarter of Fiscal-2010, and it is a mixed bag.  The storage and data management company said that non-GAAP earnings were $0.22 EPS and said revenues fell 4% from last year’s Q1 to $838 million.  Thomson Reuters had estimates of $0.20 EPS and $828.3 million in revenues.  A key management change is trumping earnings today.

NetApp is not being grossly aggressive nor overly confident by any measure.  It went as far as to say, “Given the reduced visibility caused by the recent changes in the macroeconomic environment, NetApp will not be providing revenue guidance for the second quarter of fiscal year 2010.”

Its only guidance was estimates of non-GAAP gross margins for the second quarter of fiscal year 2010 to be between 62.5% and 63.0%.  As far as income, it only said non-GAAP other income for the second quarter of fiscal
year 2010 to remain at similar levels on non-GAAP operating expenses of $425 million.

On top of earnings came a more important announcement that may signal a change in the company.  The company announced that Tom Georgens, NetApp’s president and chief operating officer, is succeeding Dan Warmenhoven as CEO.  It noted that this is in the culmination of a management succession process.

Shares closed up $0.04 at $22.89 today in regular trading, yet shares have traded down under $21.75 and are back around the $22.00 mark now in the after-hours session.

JON C. OGG
August 19, 2009