SUNNYVALE, Calif. (AP) — Data storage company NetApp Inc. posted a drop in fiscal third-quarter net income as its costs rose. But the results and the company’s outlook were not as bad as analysts had feared, and its shares jumped 8 percent in aftermarket trading.
NetApp said Wednesday it expects its adjusted earnings to be between 60 and 65 cents per share during the current quarter. That’s in line with the 63 cents per share that analysts were expecting, according to FactSet. The company said its revenue should be between $1.65 billion and $1.73 billion in the quarter, which was toward the high end of expectations for $1.68 billion in revenue.
Janney Capital Markets analyst Bill Choi said the guidance stoked a “relief rally,” because analysts were worried the company would predict net income well below current expectations. Investors had gotten skittish about the stock after the company missed expectations over the last two quarters, Choi said in an e-mail.
NetApp makes data storage management systems, including software and hardware products. CEO Tom Georgens said the company can gain more business as its clients redesign their data storage centers to make them more efficient and cheaper to operate.
The company said the during the quarter ended Jan. 27 it had net income of $119.6 million, or 32 cents per share, compared to $186.4 million, or 46 cents per share, during the same period the year before.
Revenue during the quarter was $1.57 billion, up from $1.29 billion in the prior year period.
The company also reported adjusted net income, excluding one-time items like stock-based compensation, of 58 cents per share. That’s up from an adjusted 56 cents per share the year before.
The results were in line with analyst expectations for adjusted net income of 58 cents per share on $1.56 billion in revenue, according to FactSet.
The company’s costs rose 48 percent in the quarter compared to the year before, with software maintenance and product costs rising sharply. Its operating expenses also rose 20 percent.
Shares rose $3.35 to $43.23 in aftermarket trading. During regular-session trading Wednesday shares gained 76 cents, or 2 percent, to close at $39.88.