Shares of storage company Network Appliances Inc. (NASDAQ: NTAP) tumbled more than 17 percent in Thursday trading, a day after the firm said it may report weaker than expected earnings in the current quarter.
Network Appliance shares shed $6.48, or 17.03 percent, to reach $31.58 in afternoon trading on the Nasdaq Stock Market.
On Wednesday the company said it expected to post lower than expected first quarter earnings, saying it experienced a slow down in March.
It now expects earnings of 24 to 25 cents per share. Revenue is also expected to drop between 6 and 7 percent to $745 million, to $753 million respectively.
Analysts polled by Thomson Financial had forecast Network Appliances to earn 31 cents a share on $814 million in revenue.
NetApp became the latest company to see business impact from US enterprise spending in the month of March, Goldman Sachs analyst Laura Conigliaro told clients this morning.
The analyst warned that the weak quarter may put additional burden for the July quarter as well - a seasonably slow time for technology spending.
With revenue forecasts now adjusted down sharply to reflect the lower backlog, the July quarter will carry most of, and possibly even all of, the burden of the shortfall in backlog, potentially confining NetAppâ€™s miss to just the July quarter if the company is able to bring in the normal bookings associated with the summer quarter, she said.
Steve Gomo, the firm's CFO, believes that NetApp can work through the dip in the first quarter, and its forecast did not point to any larger trends in the technology sector.