Even a good market, like enterprise storage, isn't completely bulletproof. Investors always try to read between the lines of the releases from IBM (NYSE:IBM), Dell (Nasdaq:DELL), EMC (NYSE:EMC) and Hewlett-Packard (NYSE:HPQ), and try to figure out the "real" story on the enterprise market. And, then, there are the occasional outlier events, like the recent flooding in Thailand that stir up the market. All of that said, slightly disappointing guidance from NetApp (Nasdaq:NTAP) shouldn't completely sour investors on this name; it is not as strong of a prospect as EMC, but the price on these shares is nevertheless interesting. (For more on the tech industry, read A Primer On Investing In The Tech Industry.)
A Mediocre Second Quarter
For its fiscal second quarter, NetApp reported about 20% revenue growth, missing the average analyst' guess but only slightly. Organic revenue growth was much more modest, though, and something in the low single-digit range (3 or 4%). Product revenue rose 23%, as reported (and up 5% sequentially) on strong year-on-year shipment growth in midrange products. Although NetApp had some issues with specific large customers, demand from the likes of Dell and Teradata (NYSE:TDC) was encouraging.
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