Investopedia: A Late Quarter Stumble Trips Up NetApp

Data storage is one of the best growth areas of technology today, but that does not mean that growth is going to follow a smooth and uninterrupted upward line. NetApp (Nasdaq:NTAP) has plenty of growth potential and could be on its way to being a legitimate numer two behind EMC (NYSE:EMC), but a major sales shortfall in July has investors bringing out the sharp knives. NetApp is going to get sent to the penalty box for a time, but investors who have some patience and appetite for risk should look at this as an opportunity to add shares.


An Iffy Start to the Fiscal Year
NetApp's revenue for the fiscal first quarter missed the average analyst estimate and only just met the low end of its prior range. That is a big change for a company that generally beats expectations and the culprit was a surprising reversal of business in July. Still, revenue for the quarter rose 26% on a year-over-year basis and about 2% on a sequential basis.

Results were clearly hurt by declines in orders from government and financial customers - NetApp reported that revenue from government customers was up just 3% in the quarter (and down 27% sequentially).

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