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Factors Setting the Tone for NetApp's (NTAP) Q2 Earnings
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NetApp (NTAP - Free Report) is slated to report second-quarter fiscal 2020 earnings results on Nov 13.
For second-quarter fiscal 2020, NetApp anticipates net revenues in the range of $1.325-$1.475 billion. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.39 billion, indicating a decline of 8.6% from the year-ago reported figure.
The company expects non-GAAP earnings for second-quarter fiscal 2020 between 91 cents and 99 cents per share. The Zacks Consensus Estimate for earnings has been steady at 94 cents in the past 30 days, suggesting a decline of 11.3% from the year-ago reported figure.
Notably, the company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed one, with the average beat being 5.77%.
Factors Likely to Influence Q2 Results
NetApp’s fiscal second-quarter top-line is likely to reflect improvement in adoption of hybrid multi-cloud offerings, Cloud Data Services and Private Cloud offerings.
Increased momentum of the company’s HCI (or hyper converged infrastructure) and new cloud partnership with VMware platforms in the fiscal second quarter, are likely to have driven revenue run rate for Cloud Data and Private Cloud business.
Moreover, NetApp entered into collaboration with Alibaba (BABA - Free Report) and Equinix. Per the deal, NetApp Private Storage (NPS) for Cloud has been integrated with Platform Equinix and Alibaba Cloud. Notably, the integration is aimed at enabling enterprises based in Indonesia to run complex workloads and applications across the multicloud platform, simplifying data management in a secure manner. Incremental adoption of NPS is expected to have bolstered Private cloud business run rate in the fiscal second quarter. Notably, the metric came in at $250 million in the last reported quarter, up 85% on a year-over-year basis.
Furthermore, the company expanded all-flash storage portfolio with end-to-end NVMe-based NetApp EF600 storage array in the fiscal second quarter. The latest solution has been witnessing traction from Mellanox, which already utilizes NetApp’s NVMe solutions across its network controllers.
However, growing expenses on product development amid stiff competition from fellow storage peers including Pure Storage (PSTG - Free Report) is likely to have limited margin expansion in the fiscal second quarter.
Notably, for the fiscal second quarter, the Zacks Consensus Estimate for Product revenues and Hardware Maintenance and Other Services revenues, are pegged at $770 million and $349 million, indicating a year-over-year decline of 15.7% and 5.2%, respectively.
Meanwhile, the Zacks Consensus Estimate for Software Subscriptions revenues is projected to be $261 million, suggesting an improvement of 10.6% from the year-ago reported figure.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Factors Setting the Tone for NetApp's (NTAP) Q2 Earnings
NetApp (NTAP - Free Report) is slated to report second-quarter fiscal 2020 earnings results on Nov 13.
For second-quarter fiscal 2020, NetApp anticipates net revenues in the range of $1.325-$1.475 billion. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.39 billion, indicating a decline of 8.6% from the year-ago reported figure.
The company expects non-GAAP earnings for second-quarter fiscal 2020 between 91 cents and 99 cents per share. The Zacks Consensus Estimate for earnings has been steady at 94 cents in the past 30 days, suggesting a decline of 11.3% from the year-ago reported figure.
Notably, the company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed one, with the average beat being 5.77%.
Factors Likely to Influence Q2 Results
NetApp’s fiscal second-quarter top-line is likely to reflect improvement in adoption of hybrid multi-cloud offerings, Cloud Data Services and Private Cloud offerings.
Increased momentum of the company’s HCI (or hyper converged infrastructure) and new cloud partnership with VMware platforms in the fiscal second quarter, are likely to have driven revenue run rate for Cloud Data and Private Cloud business.
NetApp, Inc. Price, Consensus and EPS Surprise
NetApp, Inc. price-consensus-eps-surprise-chart | NetApp, Inc. Quote
Moreover, NetApp entered into collaboration with Alibaba (BABA - Free Report) and Equinix. Per the deal, NetApp Private Storage (NPS) for Cloud has been integrated with Platform Equinix and Alibaba Cloud. Notably, the integration is aimed at enabling enterprises based in Indonesia to run complex workloads and applications across the multicloud platform, simplifying data management in a secure manner. Incremental adoption of NPS is expected to have bolstered Private cloud business run rate in the fiscal second quarter. Notably, the metric came in at $250 million in the last reported quarter, up 85% on a year-over-year basis.
Furthermore, the company expanded all-flash storage portfolio with end-to-end NVMe-based NetApp EF600 storage array in the fiscal second quarter. The latest solution has been witnessing traction from Mellanox, which already utilizes NetApp’s NVMe solutions across its network controllers.
However, growing expenses on product development amid stiff competition from fellow storage peers including Pure Storage (PSTG - Free Report) is likely to have limited margin expansion in the fiscal second quarter.
Notably, for the fiscal second quarter, the Zacks Consensus Estimate for Product revenues and Hardware Maintenance and Other Services revenues, are pegged at $770 million and $349 million, indicating a year-over-year decline of 15.7% and 5.2%, respectively.
Meanwhile, the Zacks Consensus Estimate for Software Subscriptions revenues is projected to be $261 million, suggesting an improvement of 10.6% from the year-ago reported figure.
Zacks Rank
Currently, NetApp carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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