Data storage equipment maker NetApp Inc (NTAP.O) reported a 6 percent dip in fiscal second-quarter profit and forecast lower than expected results for the current quarter as large corporations trim technology spending in a shaky economy.
The company, which makes disk storage units and software for holding and managing data, also warned that it is too early to tell if the recent floods in Thailand will cause a spike in prices for the disk drives central to its products.
Some of our major accounts, which are proxies for the overall economic climate, saw a little bit of slowdown, said NetApp Chief Executive Tom Georgens in a phone interview. Absent those, the rest of our business was certainly in line.
Georgens said there were alternative manufacturing sources to Thailand for the high-specification drives used by NetApp in its powerful devices, so they may not be hit as hard by a shortage as PC makers.
The expectation is that enterprise-class drives -- typically the drives we use -- are in better shape than consumer class drives in terms of supply, said Georgens.
Prices will go up. The question is how much of that will be passed on to end-users and what will that mean for demand. We'll see late December, into January how much new output is coming out of these factories and only then are we really going to know what the state of the industry is.
For the fiscal second-quarter ending October 28, the Silicon Valley-based company reported a profit of $165.6 million, or 44 cents per share, compared with $175.4 million, or 45 cents per share, a year earlier.
Excluding items, it reported a profit of 63 cents per share. That beat the average 59 cents forecast by analysts, according to Thomson Reuters I/B/E/S.
Net sales rose 20 percent to $1.5 billion, falling short of the average forecast of $1.53 billion.
For the current quarter, NetApp forecast profit excluding items of 56 cents to 60 cents per share, below Wall Street's average forecast of 63 cents.
NetApp expects sales of $1.52 billion to $1.61 billion in the quarter, below the $1.63 billion average analysts' estimate.
NetApp shares fell 6 percent in after-hours trading to $37.99, after closing at $40.74 in regular trading on Nasdaq.