Network Appliance reported quarterly earnings that hit analysts' estimates, but the company's shares fell in late trading as the company gave guidance on the soft side.
NetApp reported a per-share profit of 22 cents in its fiscal first quarter, excluding one-time charges and other items. Sales in the quarter reached $868.8 million.
The Sunnyvale, Calif.-based provider of enterprise network storage and data management products forecast second-quarter earnings of 16 cents to 19 cents a share, or 27 cents to 30 cents a share excluding items, on revenue of $910 million to $940 million.
Customers continued to expand their storage infrastructures despite ''economic uncertainty,'' NetApp said, but its earnings forecast range for the fiscal second quarter dipped below the Wall Street average.
The mean estimate of analysts polled by Thomson Reuters was for a per-share profit of 30 cents on revenue of $918 million.
Shares of the company , which closed Wednesday down 2.36 percent at $25.69, fell more than 4 percent in extended electronic trading.
Net income for the first quarter of fiscal 2009 was $38 million, or 11 cents a share, compared with $34 million, or 9 cents a share, in the same quarter a year ago.
Separately, NetApp said it has approved a new stock repurchase program of up to $1 billion.
"I don't think the results lived up to the expectations and upside scenarios that some investors had,'' Pacific Crest analyst Brent Bracelin said. "That said, it is a solid quarter. Guidance was slightly above where we thought it would be on revenue, and storage fundamentals look pretty healthy.''
Some analyst expectations were a bit inflated, but the company has not deviated from the forecasts that it laid out earlier this year, Chief Executive Dan Warmenhoven told Reuters in an interview.
"Certainly I've seen a number of analysts say they expect us to 'beat, beat beat','' he said. "We met met met.''
NetApp also is hiring aggressively now, something that highlights their execution risk if a slowdown hits the business, said Bracelin.
"This is a company that continues to invest and expand its sales force,'' Bracelin said. "That's limiting the magnitude of upside flowing through to the bottom line.''
Warmenhoven said the company does not expect any significant change in macroeconomic conditions, which means other companies will keep spending tight on information technology—but not compress it.
He still sees the storage sector growing at about 6 percent this year and the company growing at 2.5 to 3 times the market's rate, he added.
- Wire copy contributed to this report.